IPO Alert: Ethos files papers for an initial public offering

The watch market in India was valued at ₹13,500 crores in fiscal 2020. It is expected to grow at a compound annual rate of 10.6% and reach ₹22,300 crores by fiscal 2025.

Currently, the share of the organized sector in the overall watch market is around 65%, and the unorganized sector accounts for the remaining 35%. In fiscal 2020, the former represented around ₹8,700 crores of the total market.

Ethos Limited has filed a preliminary prospectus with capital markets regulator SEBI to raise funds through an initial public offering. The IPO consists of a fresh issue of shares aggregating up to ₹400 crores and an offer for sale of up to 1,108,037 shares, according to the draft red herring prospectus. Additionally, the company may consider an issue of shares in a private placement aggregating up to ₹50 crores. If such placement is completed, the size of the fresh issue will be reduced.

Ethos plans to utilize ₹29.8 crores from the net proceeds for repayment or prepayment of loans. The company will use ₹33.27 crores for establishing new stores and ₹1.98 crores for financing the up-gradation of its enterprise resource planning system. The remaining amount will be used for general corporate purposes.

Company Profile

Ethos Limited is the largest luxury/premium watch retailer in the country, which operates through both online and physical retail channels. It has 50 physical stores in 17 cities across the country, operating in a multi-store format.

The Chandigarh-based company has the largest portfolio of premium/luxury watches in India, including 50 luxury brands like 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.

The company enjoys a healthy market share of 20% in the exclusive luxury segment and 13% in the premium/luxury segment.

Key Numbers

Ethos reported a total income of ₹403crores for the year ended March 31, 2021, versus ₹461 crores in the previous year. The company generated a net profit of ₹5.78 crores, against a loss of ₹1.33 crore in the prior year.