Shoewear retailer Metro Brands Ltd, a company backed by ace investor Rakesh Jhunujunwala, on Wednesday made a tepid stock market debut as it opened trading at a 12.6% discount to its issue price of Rs 500 apiece.
By the end of the trading session, however, the company’s stock staged a recovery and managed to close marginally above its issue price at Rs 502 per share.
The three-day initial public offering (IPO) of Metro Brands was subscribed 3.64 times on the last day of subscription, that opened on 10 December and closed on 14 December.
The company retails footwear own-brands like Metro, Mochi, Walkway, Da Vinchi and J Fontini, as well as certain third-party brands such as Crocs, Skechers, Clarks, Florsheim and Fitflop. Metro Brands also offers accessories, such as belts, bags, socks, masks and wallets at its stores.
At present, Metro Brands has 598 stores in 136 cities spread across India. Of these, 211 stores were opened in the last three years.
This is the second Rakesh Jhunjunwala-backed company, in the span of a month, which has disappointed investors with a weak market debut.
Investors, especially retail ones, have historically tended to follow Jhunjunwala’s stock market bets in the hope that they too can make a handsome profit by replicating Jhunjunwala’s stock picks.
Earlier this month, Star Health & Allied Insurance Co Ltd, another Jhunjunwala-backed company had seen its stock price fall below the issue price on listing day.
The Star Health stock began trading at Rs 848 apiece, down 5.69%, from the issue price of Rs 900. On Wednesday, the stock closed at Rs 799.95 on the NSE, still trading below its IPO price.
This followed a poor response to its IPO, where the company barely managed to reach the full subscription mark and had to settle with raising a lower amount than it had planned to.