Ethos got listed at Rs 825, a discount of 6 per cent over its issue price of Rs 878 apiece on the National Stock Exchange (NSE). The scrip was listed at a discount of 5 per cent to the issue price at Rs 830.
The pain intensified post listing as the scrip dropped as much as 12 per cent to Rs 774 on BSE. The scrip scaled an intraday high of Rs 839.65 on Monday, before the sharp selloff.
The majority of the analysts are negative on the issue, thanks to its pricey valuations, muted performance and weak financials.
Santosh Meena, Head of Research,
said high valuations, lack of exclusive agreements with watchmakers, inventory heavy operations make this issue suitable only for long-term investors having a high-risk appetite.
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“Those who applied for listing gains can maintain a stop loss of Rs 800,” he added. None of the experts has suggested entering the counter post listing.
Ethos raised Rs 472.29 crore via its primary stake sale, which was open for subscription between May 18-20 as the company sold its shares in the range of Rs 836-878 apiece.
The issue was overall subscribed 1.04 times, with the quota for QIB investors getting 1.06 times subscription whereas the HNI portion fetched 1.48 times bids. The retail portion was booked only 84 per cent.
After a muted debut on the stock market, Ethos continues to remain in the negative territory, said Mohit Nigam, Head – PMS, Hem Securities. “This can be attributed to the rich pricing and current market sentiments.”
“Ethos is one of the largest sellers of luxury watches in India having a strong customer base. However, high valuations, inventory heavy operations have made it a suitable investment opportunity for long-term investors.”
Arafat Saiyed, Senior Research Analyst at
Securities cautioned investors over the aggressive pricing, which hardly leaves anything meaningful on the table for investors.
Similarly, Saurabh Joshi Research Analyst at Marwadi Financial Services said that the listing was marginally below expectations.
“We are recommending investors to hold the stock from a short to medium-term perspective. The IPO was richly priced, and the company will have to continue growing its business at a high growth rate in order to justify the valuation which keeps cautious from a long term perspective,” he said.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)