IPO Synopsis
Ethos, India’s Luxury and premium watch retail player, has filed preliminary papers with SEBI to raise funds through an initial public offering.
The IPO consists of a fresh issue of equity shares aggregating to Rs.400 crore and an offer-for-sale (OFS) of up to 1,108,037 equity shares.
The company may consider a further issue of equity shares including a private placement aggregating up to Rs.50 crore.
The largest shareholding member is KDDL ltd who holds 76.61% stake in Ethos (directly and indirectly). Emkay Global Financial Services and InCred Capital Wealth Portfolio Managers are the book running lead managers to the issue.
Objective of Ethos IPO
The proceeds from the issue will be used in the following manner:
1. Rs 29.89 crore will be utilised for the repayment of debt,
2. Rs 236.75 crore for funding working capital requirements,
3. Rs 33.27 crore for financing establishment of new stores,
4. Rs 1.98 core for financing upgradation of enterprise resource planning (ERP) and
5. general corporate purposes
Ethos IPO Subscription Status
| QIB | NII | Retail | TOTAL | |
|---|---|---|---|---|
| Day 1 | 0.00x | 0.04x | 0.53x | 0.27x |
| Day 2 | 0.19x | 0.25x | 0.68x | 0.44x |
| Day 3 | 1.06x | 1.48x | 0.84x | 1.04x |
About Ethos
Ethos is India’s largest luxury and premium watch retail player with an online and physical presence. Ethos has the largest portfolio of premium and luxury watches in India with 50 retails stores in a multi-store format across 17 cities and also has online presence through social media platorms. The company also deals in retail of certified pre-owned luxury watches since FY19. It caters to 50 premium and luxury watch brands including 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 commands a healthy market share of 20% in the luxury watch retail segment and 13% in the premium and luxury watch retail segment in India.
Under the brand name Ethos, it opened its first luxury retail watch store in January 2003 at Chandigarh, promoted by KDDL Ltd.
It has 50 physical retail stores in 17 cities in India in a multi store format, and offers an omnichannel experience to its customers through its website and social media platforms.
The 17 cities include New Delhi Mumbai, Bengaluru, Hyderabad, Chennai, Kolkata, Chandigarh, Ahmedabad, Jaipur, Lucknow, Gurgaon, Guwahati, Ludhiana, Nagpur, Noida, Pune and Thane in India. The 50 stores are categorised into 14 Ethos Summit Stores and one Airport store (that houses bridge to luxury, luxury and high luxury brands), 15 multi-brand outlets and 10 Ethos Boutiques both housing bridge to luxury and premium brands, 9 luxury segment mono-brand boutiques offering a single luxury watch brand, and 1 CPO luxury watch lounge for pre-owned watches
Ethos started a loyalty programme ‘Club Echo’, a customer relationship management initiative offers customers a rewarding experience in luxury retail category and operates as a dynamic incentive scheme providing benefits to repeat customers based on their cumulative purchasing. The database generated from this programme, gives them access to important information on customers and their buying trends and this could be used to further develop business strategies and expand the business.
Ethos Financial Status
Profit and Loss
Balance Sheet
| Particulars (in Rs. Crores) | FY21 | FY20 | FY19 |
|---|---|---|---|
| Revenue | 386.57 | 457.85 | 443.53 |
| EBITDA | 56.44 | 54.40 | 58.26 |
| PAT | 5.79 | -1.33 | 9.89 |
| Particulars (in Rs. Crores) | FY21 | FY20 | FY19 |
|---|---|---|---|
| Total Assets | 392.04 | 421.96 | 368.93 |
| Share Capital | 18.21 | 18.21 | 16.90 |
| Total Borrowings | 51.99 | 75.75 | 77.07 |
| Particulars (in Rs. Crores) | FY21 | FY20 | FY19 |
|---|---|---|---|
| Net cash generated from / (used in) operating activities | 63.47 | 36.98 | -1.16 |
| Net cash from / (used in) investing activities | -10.04 | -14.56 | -11.90 |
| Net cash flow from / (used in) financing activities | -44.96 | -20.15 | 13.34 |
| Net increase (decrease) in cash and cash equivalents | 8.47 | 2.27 | 0.28 |
Peer Comparison
There are no listed companies in India that engage in a business similar to that of the company.
Key Points
-
Strengths:
1. Access to a large base of luxury Customers
2. Deep understanding of digital and Omnichannel commerce
3. Strategically located and well invested store network with attractive in-store experience
4. Strong and long-standing relationships with luxury watch brands and luxury group
5. Leadership position in an attractive luxury watch market -
Risks:
1. The company does not have definitive agreements for supply of products or fixed terms of trade with majority of its suppliers, hence disruption in supply of products can affect the profitability of the business.
2. The business partly depends on the success and reputation of the third-party brands globally, and any negative impact on these brands, or a failure by Ethos or owners of these brands to protect them, as well as other intellectual property rights and proprietary information, may adversely affect the business
3. Inability to identify customer demand accurately and maintain an optimal level of inventory in the stores
4. Dependent on watch brands for the manufacturing of all the products it sells, hence, any disruptions in manufacturing end can affect the business
5. The company is subject to various litigation, regulatory and other proceedings and same are pending at various level of adjudication
How to apply for an IPO?
-
Login to your 5paisa account and select the issue in the
current IPO section -
Enter the number of lots and price at which you wish to
apply for -
Enter your UPI ID and click on submit. With this, your
bid will be placed with the exchange -
You will receive a mandate notification to block funds in
your UPI app -
Approve the mandate request on your UPI and funds
will be blocked
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Please keep below documents handy:
- PAN Card
- Aadhar Card
- Bank Account Number
FAQs
The Ethos Limited IPO lot size is 17 shares. A retail-individual investor can apply for minimum of 1 lot (17 shares or Rs.14,926) and maximum up to 13 lots (221 shares or ₹194,038).
The price band of Ethos IPO ranges between ₹836 to ₹878 per share
Ethos Limited IPO opens on May 18, 2022, and closes on May 20, 2022
The Ethos IPO comprises a fresh issue of equity shares aggregating to Rs.400 crore and an offer-for-sale (OFS) of up to 1,108,037 equity shares.
Ethos is promoted by Yashovardhan Saboo, KDDL Limited and Mahen Distribution Limited.
The allotment date for the Ethos IPO is May 25, 2022
The Ethos IPO listing date is May 30, 2022
Emkay Global Financial Services and InCred Capital Wealth Portfolio Managers are the book running lead managers to the issue.
The proceeds from the issue will be used in the following manner:
1.Rs 29.89 crore will be utilised for the repayment of debt,
2.Rs 236.75 crore for funding working capital requirements,
3.Rs 33.27 crore for financing establishment of new stores,
4.Rs 1.98 core for financing upgradation of enterprise resource planning (ERP) and
general corporate purposes
To apply for the Ethos IPO, follow the steps given below
1. Login to your 5paisa account and select the issue in the current IPO section
2. Enter the number of lots and price at which you wish to apply for
3. Enter your UPI ID and click on submit. With this, your bid will be placed with the exchange
4. You will receive a mandate notification to block funds in your UPI app
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