Luxury watch retailer Ethos misses stock market cues; lists at a 5% discount

• Shares of Ethos listed at ₹830 while the shares were allotted at ₹878 per share.
• The IPO received decent response from investors as it was subscribed 1.04 times on the last day of the bidding.
• The market capitalisation of the company stood at ₹1,937 crore.

Chandigarh-based luxury watch retailer Ethos was widely expected to make a tepid listing debut on the stock markets. Yet, there was a silver of optimism since the Sensex soared 800 points on opening today.

In reality, there was no such respite - its stock fell 5.47% on listing - just as the grey market predicted. The unofficial grey market suggested that it would list at a discount of ₹5 per share.

The market capitalisation of the company stands at ₹1,937 crore, according to BSE data.

The IPO was oversubscribed 1.04 times by investors. Retail investors had subscribed to the IPO by 0.84 times.

Analysts believe that Ethos is a very small company focused on one category as compared to other listed retail players. However, they believe there is scope for growth in future as it is expanding its stores in the next three years.

The company will use IPO money to repay its debt, as working capital, and to establish new stores and upgrade existing stores.

The company has a portfolio of 50 premium and luxury watch brands like Omega, IWC Schaffhausen, Jaeger LeCoultre, Panerai, Bvlgari, H. Moser & Cie, Rado, Longines, Baume & Mercier, Oris SA, Corum, Carl F. Bucherer, Tissot, Raymond Weil, Louis Moinet and Balmain.

It has a market share of 20% in the exclusive luxury segment, and 13% share in the total retail sales in the premium and luxury segments.

Ethos has made a profit of ₹5.78 crore in FY21 as against a loss of ₹1.33 crore in FY20. However, its revenue has been on a decline for the last three fiscal years.

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