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Ethos Ltd., India’s luxury and premium watch retailer is finally coming up with its Initial Public Offering looking to raise Rs. 472.29 Cr. The IPO will open for subscription on May 18th, 2022, and close on May 20th, 2022. In this article, we will look at the Ethos Limited IPO Review 2022 and analyze its strengths and weaknesses. Keep reading to find out! 

About Ethos Limited

Ethos Limited is India’s largest luxury and premium watch retail player. It serves its customers through both online and physical stores. The company has a 20% market share in the luxury watch retail segment and a 13% market share in the premium and luxury watch retail segment in India.

Ethos Limited - Total Assets

They have the largest portfolio of premium and luxury watches in India which includes 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 has around 50 physical retail stores across 17 cities in India in a multi-store format. They also have an established presence through their website and social media platforms which offer an Omnichannel experience to the customers. 

Ethos Limited - Profit after tax

In addition to the premium and luxury watch retail, they also undertake retail of certified pre-owned luxury watches under the ‘Certified Pre-Owned’ (“CPO”) luxury watch lounge located at New Delhi. As of December 31, 2021, the company’s website had 21,844,216 visitor sessions.

Comparison of Ethos Limited competitors

Ethos Limited - Competitors

Industry Overview

Watch market in India was valued at ₹ 13,500 crores in Fiscal 2020 and is expected to grow at a CAGR of 10.6% to reach ₹ 22,300 crores by Fiscal 2025. The watch industry in India is dominated by the organized sector having a 65% share of the overall market, and the unorganized market contributes to 35% of the overall market. While the organized watch market in Fiscal 2020 was estimated at ₹ 8,700 crores, the unorganized market was approximately ₹ 4,780 crores.

Industry Overview

The overall Luxury market in India is expected to show a path to recovery. It is expected that the Luxury market would be valued at INR 69,430 Cr. by FY 2025 and grows by ~11% CAGR over the next 4 years.

Strengths of the Ethos Limited 

  • Along with a strong market share in India, ethos also enjoys a premium customer base with access to more than 2,76,000 HNI customers.
  • The company has a strong omnichannel presence which is designed to enable the customers to access its products and receive information & specialist advice in the channel of their choice, with each channel designed to support the others.
  • They have 50 strategically located retail stores with over 7,000 varied premium and luxury watches and about 30,000 watches in stock at any given time.
  • Over the years ethos has been able to establish strong and long-standing relationships with multiple luxury watch brands and luxury groups.
  • The company has an experienced and committed management team with a proven track record.

Weaknesses of the Company

  • Any resurgence in the covid related lockdowns or restrictions can have an adverse effect on the business of the company. 
  • A majority of their supply comes from a few suppliers. Any change in the terms of their agreement will have a negative impact on their business. 
  • The success of the company highly depends on the reputation and success of the brands that they are selling
  • The sales of the stores are majorly concentrated among top tier cities across India
  • The company has has multiple legal proceedings involving its directors and promoters

Ethos Limited Key IPO Information

Ethos Limited IPO - Promoter Holding

Promoters: Yashovardhan Saboo, Kddl Limited And Mahen Distribution Limited

Book Running Lead Managers: Emkay Global Financial Services Limited And Incred Capital Wealth Portfolio Managers Private Limited

Registrar To The Offer: Kfin Technologies Private Limited

The Objective of the Issue

The Net Proceeds will be utilised towards funding the:

  • Repayment or prepayment, in full or in part, of all or certain borrowings
  • Working capital requirements 
  • Financing the capital expenditure for establishing new stores and renovation of certain existing stores and upgradation of enterprise resource planning software
  • General corporate purpose

 In Closing

In this article, we covered the Ethos Limited IPO Review. Analysts remain divided on the IPO and its potential gains, especially at a time when the global markets are falling exponentially. For investors, it can be a good opportunity to look into the company and apply for the IPO after analyzing the prospects and strengths. 

Let us know what you think about the Ethos Limited IPO Review in the comments below? Happy Investing!

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