Ethos IPO

Ethos, an Indian company that sells luxury watches, filed paperwork with the SEBI to raise around Rs. 472.29 crores through this initial public offering (IPO). This public offering consists of a fresh issue of 500 million shares and an offer-for-sale (OFS) of 11,08,037 equity shares and another Rs. 50 crores through private placement. The largest shareholder is KDDL, which owns 76.61% of Ethos (directly and indirectly). Emkay Global Financial Services and InCred Capital Wealth Portfolio Managers are managing the IPO.

The company is offering 50 per cent of the equity shares to qualified institutional buyers (QIB), with 15 per cent reserved for non-institutional investors (NII). Further, retail bidders will receive 35 per cent of the offer.

More details of this initial share sale are given in the table below:

Issue Type

Book Built

Listing at

BSE & NSE

Price Band

Rs. 836 to Rs. 878

per equity share

Minimum Order Quantity

17 shares

Face Value

₹10

per equity share

Market Lot

17 shares

Issue Type

Book Built

Listing at

BSE & NSE

Price Band

Rs. 836 to Rs. 878

per equity share

Minimum Order Quantity

17 shares

Face Value

₹10

per equity share

Market Lot

17 shares

Listing at NSE, BSE

Ethos IPO Important Dates

IPO Open Date 18 May 2022
IPO Close Date 20 May 2022
Basis of Allotment Publication Date 25 May 2022
Initiation Of Refunds 26 May 2022
Credit Of Shares To
Demat Account
27 May 2022
IPO Listing 30 May 2022

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Ethos Limited IPO Latest News and Subscription Status Today [Live]

At 05:20:00 PM.
  • This IPO has been subscribed 1.04x by 05:20 PM. on Day 3
  • It is a public issue of 39,79,957 equity shares.
Status of Subscription
  • (QIB) Qualified institutional buyers: 1.06x
  • (NII) Non-institutional buyers: 1.48x
  • (RII) Retail Individual buyers: 0.84x
At 11:30:00 AM.
  • This IPO has been subscribed 0.49x by 11:30 AM. on Day 3
  • It is a public issue of 39,79,957 equity shares.
Status of Subscription
  • (QIB) Qualified institutional buyers: 0.23x
  • (NII) Non-institutional buyers: 0.33x
  • (RII) Retail Individual buyers: 0.71x
At 05:10:00 PM.
  • This IPO has been subscribed 0.44x by 05:10 AM. on Day 2
  • It is a public issue of 39,79,957 equity shares.
Status of Subscription
  • (QIB) Qualified institutional buyers: 0.19x
  • (NII) Non-institutional buyers: 0.25x
  • (RII) Retail Individual buyers: 0.68x
At 11:15:00 AM.
  • This IPO has been subscribed 0.30x by 11:15 AM. on Day 2
  • It is a public issue of 39,79,957 equity shares.
Status of Subscription
  • (QIB) Qualified institutional buyers: 0.00x
  • (NII) Non-institutional buyers: 0.07x
  • (RII) Retail Individual buyers: 0.57x
At 05:15:00 PM.
  • This IPO has been subscribed 0.27x by 05:15 PM. on Day 1
  • It is a public issue of 39,79,957 equity shares.
Status of Subscription
  • (QIB) Qualified institutional buyers: 0.00x
  • (NII) Non-institutional buyers: 0.04x
  • (RII) Retail Individual buyers: 0.53x
At 11:55:00 AM.
  • This IPO has been subscribed 0.16x by 11:55 AM. on Day 1
  • It is a public issue of 39,79,957 equity shares.
Status of Subscription
  • (QIB) Qualified institutional buyers: 0.00x
  • (NII) Non-institutional buyers: 0.01x
  • (RII) Retail Individual buyers: 0.33x

About Ethos

Ethos Limited sells premium luxury watches through its website, social media platforms, and physical stores. The business model of this company has an 'omnichannel' approach, meaning that customers can purchase products at one store and return them at another or browse the catalogue online and place orders with doorstep delivery. Ethos has now turned towards floating an IPO to increase its market reach.

Ethos IPO Objectives

The company boasts of 50 retail locations in 17 different cities, including New Delhi and Mumbai. At any given time, the company offers 7,000 different brands of watches and has 30,000 watches in stock. Apart from that, the Securities and Exchange Board of India (SEBI) issued the company an observation letter when it began plans to launch its initial public offering (IPO). The proceeds from this public issue will be used toward financing its expansion plans and meeting working capital. According to the draft prospectus, the objectives of this initial share sale are as follows:

- The company can repay or prepay all or part of the loans it receives.
- Funding the firm’s working capital requirements.
- To finance the capital expenditure associated with establishing new stores.
- The company plans to upgrade its enterprise resource planning software and finance the renovation of several existing outlets.
- General corporate purpose.

Why should you invest in Ethos IPO?

Here are the reasons why individuals should subscribe to this initial public offering.

  • None of the publicly traded companies in India engages in a business similar to Ethos.
  • It commands a healthy 20% market share in the luxury watch retail segment. It also has a market share of 13% in the premium watch retail segment in the nation.
  • The company plans to use Rs 29.89 crores for debt repayment.
  • It plans to use Rs 236.75 crores for working capital purposes.
  • The company has allotted Rs 33.27 crores for financing the opening of new stores.
  • The ERP (Enterprise Resource Planning) project will be financed with a capital expenditure of Rs 1.98 crore.
  • Ethos started Club Echo, a loyalty program to reward and recognize customers. The rewards offered to customers help the company gain valuable information about customers and their buying habits, which it can use to develop new strategies and expand its business.

Financial highlights

As mentioned in its DRHP submitted to market regulator SEBI, the financial highlights of Ethos for the past three years are stated in the table below:

Financial Year Total Assets in Lakhs Total Revenue in Lakhs Profit After Tax in Lakhs
FY 2021 Rs. 39,204.38 Rs. 40,314.23 Rs. 578.53
FY 2020 Rs. 42,195.65 Rs. 46,100.56 Rs. 133.40
FY 2019 Rs. 36,892.56 Rs. 44,509.63 Rs. 988.88

How to apply for Ethos IPO?

You can apply for this IPO via two different routes. They are explained in the sections below:

UPI

  • Link your bank account to a UPI ID.
  • Register your UPI id with your Demat account.
  • Subscribe for Ethos IPO and approve the payment on your UPI ID.

Demat Account

Ethos IPO - Noteworthy Highlights

The following are the noteworthy highlights for interested investors to consider:

  • Ethos is a watch retailer operating in India and has been the largest watch retailer in India. Its models are available on the company website, on Amazon, and at retail locations in India.

  • The brand portfolio boasts 50 premium watch brands, including those from Louis Moinet, Jaeger LeCoultre, Panerai, Omega, Carl F. Bucherer, Tissot, Rado, H. Moser & Cie., IWC Schaffhausen, Bvlgari, Longines, Baume & Mercier, Oris SA and Raymond Weil.

  • The company has 50 retail stores in 17 cities and stocks about 7,000 different watches each. Ethos also ran a website that had 21 million user sessions each month.

  • Ethos recorded a net profit of Rs 5.79 crores while generating revenue of Rs 403.14 crores in the fiscal year 2020-21.

Ethos IPO - SWOT Analysis

Strengths

  • By targeting luxury consumers, the business of this company has been able to grow exponentially.
  • The firm possesses a deep knowledge of e-commerce and omnichannel commerce.
  • The company has strategically placed its stores in high-traffic areas and invested its resources in creating a pleasant experience for customers.
  • It has established strong and long-standing partnerships with luxury watch brands and, subsequently, a customer base of luxury groups.
  • The luxury watch market is attractive for brand leadership.
  • The company's management team has years of experience in the business and is committed to delivering results.

Weaknesses

  • Future pandemics or natural disasters could negatively impact the business of Ethos Limited.
  • The majority of the company's suppliers do not have signed contracts or written agreements with the company.
  • The company is dependent on the production and global performance, and reputation of its watch brands.
  • The company's inability to assess client demand effectively and maintain a proper level of stock in its stores might negatively affect operations.

Opportunities

  • The company can pay off or prepay part of the loans it has taken out.
  • The firm needed to obtain funds in order to meet its working capital requirements.
  • The company plans to finance the capital expenditure associated with building new stores.
  • The company plans to upgrade its enterprise resource planning software and renovate several existing outlets.

Threats

  • The company does not have specific agreements in place with most of its suppliers, which means that disruptions in supply can lead to problems.
  • The business of Ethos partly relies on successful third-party brands. If these brands fail, the company may be adversely affected.
  • Incorrectly identifying customer demand and inadequate inventory levels can lead to lost sales.
  • The company depends heavily on watch brands for the manufacturing of all of its products. In the event of disruptions in manufacturing, the company's sales will suffer.

Competitive Analysis: Market Peers

As of now, there are no known listed competitors who have indulged in this niche market where Ethos is the sole leader of the same.

Ethos IPO FAQs

What are the minimum and maximum lot sizes in Ethos IPO?

The minimum lot for this IPO of Ethos consists of 17 shares. An individual retail investor is allowed to apply for a maximum of 221 shares (13 lots).

What is the investors’ reservation quota for the Ethos IPO?

Of the company's shares, 50 per cent will be reserved for qualified institutional buyers. Another 15 per cent will go to non-institutional investors. Further, 35 per cent will be available for retail bidders.

What is the price band of Ethos IPO?

The price band for the Ethos IPO is Rs. 836 to Rs. 878 per share.

What is the issue size of Ethos IPO?

The IPO will have fresh equity issuance of Rs. 375 crores and an offer for sale of up to 1.1 million shares by promoters and shareholders. The IPO size, considering the upper price band, is Rs. 472 crores. The company is set to float the IPO on 18 May 2022 and will close on 20 May 2022.

Who is the owner of Ethos Limited?

Pranav Saboo is the founder and CEO of Ethos Watch Boutiques.

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