Ethos, the Luxury Watch Brand, Files IPO Papers With SEBI

Ethos, a luxury and premium watch retailer, has filed a preliminary prospectus with SEBI, India’s capital markets regulator, in order to raise funds through an IPO. According to the draught red herring prospectus, the IPO will include a fresh issue of equity shares worth Rs 400 crore and an offer for sale of up to 1,108,037 equity shares (DRHP). The company may also consider issuing additional equity shares, including a private placement worth up to Rs 50 crore. The size of a new issue will be reduced if this placement is completed.

The company is an authorized retailer for Rolex, Omega, Tag Heuer, Favre-Leuba, and IWC, among other Swiss watch brands. For its IPO, it is working with investment banks Emkay Global and Incred Capital. IIFL and Senco are collaborating.

Ravi Adusumalli’s Elevation Capital, formerly known as SAIF Partners (an abbreviation for SoftBank Asia Infrastructure Fund), is backing the two companies. SAIF Partners was one of the Japanese investment behemoth’s first investee entities in India. In 2014, Elevation Capital purchased a 10% stake in Ethos’ parent company, KDDL. The following year, it bought a stake in Senco.

Ethos Limited is a material subsidiary of KDDL Limited, a publicly traded company. Ethos Watches is India’s largest chain of luxury watch boutiques, with 50 locations and over 60 premium luxury watch brands. KDDL Limited’s stock last traded at Rs. 984.00 on the BSE, compared to a previous close of Rs. 985.35. During the day, 4460 shares were traded in 617 trades, for a total of 4460 shares traded.

Purpose of the IPO:

Rs 29.89 crore will be used to repay debt, Rs 236.75 crore will be used to fund working capital requirements, Rs 33.27 crore will be used to fund the opening of new stores, and Rs 1.98 crore will be used to fund enterprise resource planning (ERP) upgrades and general corporate purposes.

For the fiscal year 2021, the company’s revenue from operations was Rs 386.57 crore, while its net profit was Rs 5.78 crore. Revenue from operations was Rs 223.31 crore for the six months ended September 2021, with a net profit of Rs 3.75 crore. In India, it has a 20% market share in the luxury watch retail segment and a 13% market share in the premium and luxury watch retail segment.

The issue’s book running lead managers are Emkay Global Financial Services and Incred Capital Wealth Portfolio Managers.