ETHOS LIMITED IPO DARE, PRICE, ALLOTMENT & ANALYSIS DETAILS

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Ethos Limited is a premium watch retailer company. It is the largest luxury watch distributor in the country. The company delivers their products via websites and physical stores. It also boosts their sales through social media platforms. Ethos Limited’s business model is an omnichannel distribution model. Let’s delve deep into understanding some key elements about the Ethos Limited IPO.

Ethos Limited watch portfolio has a diversified brand. It has an association with 50 premium brands. It also includes 7,000 premium watches by these companies. Ethos also sells normal watches. In this segment, the company sells 30,000 different models. Ethos has a strong association with many premium watch stores. It includes:

Raymond WeilCarl F. BuchererPaneraiH. Moser & Cie
Jaeger LeCoultreRadoBaume & MercierTissot
Louis MoinetBalmainOmegaIWC Schaffhausen

The company has a wide distribution network. It has 50 physical retail stores. Ethos has categorized its stores as follows:

Ethos Summit Stores14 stores
Airport store01 store
Multi-Brand Outlets15 stores
Ethos Boutiques10 stores
Luxury Segment Mono-Brand Boutiques09 stores
CPO luxury watch lounge01 store

Ethos limited have 13% of the market share in the premium and luxury watch segment. Ethos also has a significant market share of 20% in the exclusive luxury segment. Ethos Limited has also entered a new business vertical. It has started retailing certified pre-owned luxury watches. The company started in 2019. Ethos Limited also operates its website www.ethoswatches.com. It is the largest website for premium watches regarding brand engagement. Ethos Limited has 424 employees on its payroll.

These stores are present in 17 cities in India. Ethos limited has its stores in all metro cities of the country. It also holds a physical outlet in Tier 1 and Tier 2 cities. The stores of Ethos Limited are therein:

New DelhiHyderabad,Kolkata,Ahmedabad
LucknowChandigarhGurgaonGuwahati
NagpurChennaiJaipurNoida
MumbaiBengaluruPuneThane

OBJECTS OF THE IPO ISSUE:

  • Prepayment of all the loans of the company. It is done on a consolidated basis. 
  • To meet corporate targets. 
  • To fund the working capital requirement.  
  • The company intends to finance their capital expenditure. It is to be used for establishing new stores. It is to be done for the renovation of existing stores.  
  • The company wants to upgrade its enterprise resource management and planning software.

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ETHOS LIMITED IPO DETAILS:

Ethos Limited is a company with its headquarters in Himachal Pradesh. It is located in the Parwanoo district of the state. The company recently got approval from SEBI. It earlier filed its DRHP for approval. The company is coming up with its IPO offer. The IPO offer of the company is Rs. 472.29 crores. It is a mix of an OFS offer of Rs. 97.29 crores. It also contains an issue of fresh equity worth Rs. 375.00 crores by the company.

The company stated that it would utilize funds as below:

Repayment and pre-payment of the borrowings of the companyRs. 29.89 crores
Working capitalRs. 234.96 crores
Setting up of new stores. Also used for renovation of existing storesRs. 33.27 crores
Upgradation of ERPRs. 1.98 crores
General corporate purposeRemaining funds

The company fixed the price band to Rs. 836.00 – Rs. 878.00 per equity share. Post allotment, the company’s shares will be listed on BSE and NSE. The IPO issue offer constitutes 23.04 % of the post issue fully paid-up equity capital base of the company. The company also completed their Pre – IPO allotment round. In it, the company allotted 302,663 equity shares of the company. It was allotted at Rs. 826.00 per share. It was done to raise Rs. 25 crores funding. It reduced the IPO fresh equity offer to Rs. 375.00 crores. Post IPO offer, the fully paid-up equity capital of the company will increase. It will increase from Rs. 19.08 Crores to Rs. 23.35 crores. On the upper band of IPO, the company’s market share will be Rs. 2050.06 crores.                                                        

IPO Opening DateMay 18, 2022
IPO Closing DateMay 20, 2022
Issue TypeBook Building Type Issue IPO
Face ValueRs. 10 per equity share of the company
IPO Price BandRs. 836 – Rs. 878
Market LotOne lot of 17 equity shares of the company
Minimum Order QuantityOne lot corresponding to 17 equity shares of the company
Minimum Order PriceRs. 14,926
Maximum Order Quantity13 lots corresponding to 221 equity shares of the company
Maximum Order PriceRs.  194,038
Maximum Retail Order Quantity13 lots corresponding to 221 equity shares of the company
Minimum HNI Order Quantity14 lots corresponding to 238 equity shares of the company
Listing AtBSE, NSE
Issue Size—— equity shares of the company that corresponds to Rs. 472.29 Crores
Fresh Issue4,271,080 equity shares of the company, which corresponds to Rs. 375.00 Crores
Offer for Sale1,108,037 equity shares of the company, which corresponds to Rs. 97.29 Crores
Basis of Allotment Type% Of the Offer been allotted by IPO
Qualified Institutional Buyer50
Non-Institutional Investor15
Retail35
Price Band Announcement:May 10, 2022
Anchor Investors Allotment:May 17, 2022
Basis of Allotment DateMay 25, 2022
Initiation of RefundsMay 26, 2022
The Credit of Shares to Demat AccountMay 27, 2022
IPO Listing DateMay 30, 2022

STRENGTHS AND OPPORTUNITIES OF ETHOS LIMITED IPO:

  • Ethos Limited has access to a large base of luxury Customers.
  • Ethos Limited holds a Deep understanding of its digital platform. It also has an understanding of its Omnichannel commerce.
  • It is the largest luxury watch distributor in the country. The company is also the largest company engaged in the premium watch segment.
  • The company enjoys strategically benefits from its location, store network and in-store experience.
  • Ethos Limited has a strong and long-standing relationship with its associated partners. The partners are luxury groups and luxury watches.
  • The company has leadership in the luxury watch market.
  • Ethos has an experienced and highly innovative team.
  • The company has a strong network for their sales. The omnichannel business model has helped the operations of the company. 
  • Ethos also has an opportunity to enter into the premium fragrance business segment. It will boost its margins on both the top line and bottom line. 

WEAKNESS AND THREATS OF ETHOS LIMITED IPO:

  • Ethos Limited has registered inconsistency in its financial and operations matrix. It raises concern over the sustainability of the growth of the company.
  • The IPO issue of the company is at a high valuation. It is priced at a 96 P/E ratio. On FY21 Earnings, the issue becomes at a valuation of P/E of 354. 
  • Ethos Limited is subject to various regulatory guidelines litigations. 
  • The company is highly dependent on its associated watch brands. The company is a retail outlet firm. So, any problem in the manufacturing of the watch can negatively impact the company.
  • Ethos Limited’s success also depends on the success of the brands under its association.
  • The company also needs to manage their inventory properly. Any mismanagement can lead to a negative impact on the company.
  • Ethos Limited’s other major concern is of prediction of customer demand. It also needs to be updated with all the latest trends.
  • Ethos Limited also don’t have any definitive agreement. Any disruption in supply from their associated brands can hamper the company’s operation. It can lead to a significant impact on the profitability of the company.
  • The presence of First copy articles is also a threat to their business operation.
  • Ethos Limited is engaged in very stiff competition. It faces a high level of competition from many other firms, sellers and retailers.

Also Read : List of Mainboard IPO’s in India.
Also Read : List of Upcoming SME IPO’s in India.

FINANCIAL TRENDS OF ETHOS LIMITED IPO:

ParticularsFor the year ending with the amount as in Rs in Lakhs
 31 December 2131 March 2131 March 2031 March 19
Total Assets49,399.3139,204.3842,195.6536,892.56
Total Revenue42,934.7640,314.2346,100.5644,509.63
Profit After Tax1,598.78578.53-133.40988.88
PARAMETERMARCH 21MARCH 20YoY %
   Earnings Per Share (Rs)3.18-0.73533.68
   CEPS (Rs)20.3917.2718.09
   DPS (Rs)0.000.000.00
   Book NAV/Share (Rs)85.1882.033.85
   Tax Rate (%)28.55167.18-82.92
   Core EBITDA Margin (%)11.0212.10-8.92
   EBIT Margin (%)7.235.6328.46
   Pre -Tax Margin (%)2.090.43382.97
   PAT Margin (%)1.50-0.29613.65
   Cash Profit Margin (%)9.616.8739.86
   ROA (%)1.45-0.38485.66
   ROE (%)3.80-0.97491.46
   ROCE (%)12.9011.819.30
   Asset Turnover (x)0.971.29-24.92
   Sales/Fixed Asset (x)2.394.53-47.11
   Working Capital/Sales (x)3.564.52-21.27
   Fixed Capital/Sales (x)0.420.2289.07
   Receivable days10.187.2939.57
   Inventory Days196.56169.0716.26
   Payable days93.5878.2319.62
   EV/Net Sales (x)0.130.18-29.12
   EV/Core EBITDA (x)0.841.42-40.91
   EV/EBIT (x)1.783.22-44.82
   EV/CE (x)0.130.20-35.39
   Net Sales Growth (%)-15.573.23-582.18
   Core EBITDA Growth (%)1.2855.17-97.68
   EBIT Growth (%)8.46-21.65139.08
   PAT Growth (%)533.68-109.98585.26
   EPS Growth (%)533.68-109.26588.45
   Total Debt/Equity (x)0.340.51-33.91
   Current Ratio (x)1.731.589.70
   Quick Ratio (x)0.400.3321.38
   Interest Cover (x)1.411.0829.93

COMPARISON WITH PEERS OF ETHOS LIMITED IPO:

As per the DRHP of the company, there are no listed companies as their competitor. 

PROMOTERS OF ETHOS LIMITED IPO:

The promoters of the company are as follows:

  • Yashovardhan Saboo
  • KDDL Limited
  • Mahen Distribution Limited
Pre – Issue Share Holding81.01%
Post Issue Share Holding61.65%

COMPANY ADDRESS:

Ethos Limited

Plot No. 3, Sector-III,

Parwanoo, Himachal Pradesh -173 220

India

Website: http://www.ethoswatches.com/

Phone: + 91 172 2548 223/24

Email: http://www.ethoswatches.com/

ETHOS LIMITED IPO REGISTRAR:

KFintech Private Limited

KFintech, Tower-B, Plot No 31 & 32,

Financial District, Nanakramguda, Gachibowli,

Hyderabad, Telangana India – 500 032.

Website: https://karisma.kfintech.com/

Phone: 04067162222, 04079611000

Email: ethosltd@kfintech.com

IPO LEAD MANAGER(S):

  • Emkay Global Financial Services Ltd
  • Incred Capital Financial Services Pvt Ltd

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