Can you tell me about the proposed IPO filing of Metro Shoes? Can I apply in the IPO as I am told that Rakesh Jhunjhunwala is an investor in the company?

One of India’s most popular footwear retailers, Metro Brands, has filed the draft red herring prospectus with SEBI for its proposed IPO. The issue will be a combination of fresh issue and an offer for sale or OFS. Metro will raise Rs.250 crore by issue of fresh shares and will also offload 2.19 crore shares via OFS at a price to be decided later. Promoters will also sell part of their holdings in the OFS. Metro is also planning a pre-IPO placement of Rs.10 crore.

Out of the Rs.250 crore of fresh IPO proceeds, Metro plans to use Rs.188 crore to open new stores and expand its network. Metro has some extremely popular brands in India including Mochi, Walkway and Crocs. Overall, Metro plans to open a total of 219 stores under various brands. The complete store rollout will be completed by financial year 2024-25. Metro is a virtual household name in footwear and has been in existence since 1955.

Its current store network is spread across 586 selling point spread across 134 cities in India. You are right that Rakesh Jhunjhunwala is one of the backers of this company and has been an investor for quite a few years. However, my suggestion is not to let that be a deciding factor. Please evaluate the risks of the issue, the pricing and the business plans and then ensure that it its into your own financial plan. That should be the driving factor.