Ethos of luxury at discount

The new listing today is having a terrible day. Ethos got listed on the BSE today at Rs.830 v/s IPO price of Rs.878; it went down to Rs.774 and is now trading at Rs.796 levels.

This Chandigarh based company is one of India’s largest luxury and premium watch retail players. The IPO had received a very tepid response, subscribing 1.04x, with HNIs portion largest at 1.48x, followed by QIBs at 1.06x and retail investors at 0.84x.

Our conclusion in the IPO Analysis section - Retail business, especially physical retail, is a challenging one and company’s product line doesn’t help. While it caters to HNIs, smart watches are increasingly becoming popular, at times even replacing luxury time watches. Besides millennials are seen shifting spending preference to ‘experience’ over luxury ‘material goods’. This combined with company’s weak fundamentals do not make us optimistic.  Both your time and money are precious. Hence, skip the IPO.