Monte Carlo Bombs on Debut, Sinks 18%

Monte Carlo shares listed at Rs 584 on the exchanges on Friday, nearly 9.5 per cent lower from the issue price of Rs 645. The stock slumped to Rs 530 on the National Stock Exchange in morning trade, down 18 per cent from the issue price, before making some recovery.

Monte Carlo shares ended 12.04 per cent lower at Rs 567.30, underperforming the broader Nifty, which closed with 0.81 per cent gains on Friday.

Sandeep Jain, executive director of Monte Carlo Fashions told NDTV that the company has been growing at an average 25 per cent over the last eight years and expects to grow revenues by at least by 15 per cent this year too.

Monte Carlo Fashions is an apparel brand, which caters to premium and mid-premium branded segment. It offers woolen, cotton and cotton-blended knitted apparel.

Its issue was subscribed 7.83 times, with the Initial Public Offer (IPO) receiving over 2.97 crore bids as against more than 38 lakh shares on offer.

Promoters and PE fund sold shares to raise Rs 350 crore. The promoter holding post issue stands at 63.63 per cent.

For fiscal year 2013-14, the company reported a net profit of Rs 55.4 crore on sales of Rs 502 crore. Its earnings per share (EPS) for the year stood at Rs 25.5.

At the issue price of Rs 645, the stock is valued at 25 times its FY14 EPS whereas its peers like KKCL (Kewal Kiran Clothing) and Raymond are trading at a valuation of 34.5 times and 27.7 times to its FY14 EPS respectively.