PN Gadgil Jewellers IPO Overview
On September 10, 2024, PN Gadgil Jewellers Limited launched its highly anticipated IPO, which has garnered significant enthusiasm from investors. The IPO was oversubscribed by a remarkable 2.01 times on its first day. With 1.68 crore shares available for subscription, the offering received bids for over 3.39 crore shares. The company is aiming to raise a substantial ₹1,100 crore from this initial public offering, with the subscription window closing on September 12, 2024. The price band for the shares has been set between ₹456 and ₹480 each.
IPO Subscription Details
| Category | Subscription Rate |
|---|---|
| Qualified Institutional Buyers (QIB) | 0.01 times |
| Non-Institutional Investors (NII) | 3.27 times |
| Retail Investors | 2.61 times |
| Total Subscription | 2.01 times |
About the IPO
The PN Gadgil Jewellers IPO entails the issuance of approximately 1.77 crore fresh equity shares valued at ₹850 crore, along with an offer for sale of 52.08 lakh shares worth ₹250 crore conducted by SVG Business Trust. The allotment of shares is expected to take place on September 13, 2024, while the expected listing date of the shares on the stock exchange is set for September 17, 2024.
Lot Size and Investment
For investors looking to participate in this IPO, the minimum lot size is 31 shares, requiring an investment of at least ₹14,880. The IPO is being managed by notable book-running lead managers including Motilal Oswal Investment Advisors Limited, Nuvama Wealth Management Limited, and BOB Capital Markets Limited, with Bigshare Services Private Limited serving as the registrar for the issue.
Utilization of Funds
Proceeds from the IPO will be strategically allocated to enhance the company’s operational capabilities. Specifically, ₹387 crore will be dedicated to establishing 12 new retail stores across Maharashtra. Additionally, ₹300 crore will be directed towards repaying existing debt, which currently stands at ₹377.45 crore as reported till February 29, 2024. The remainder of the funds will support general corporate initiatives, further strengthening the company’s financial position.
Market Sentiment and Potential Returns
The IPO is witnessing robust activity in the grey market, with shares trading at a premium of ₹258 as of September 10, 2024. If this trend continues, the shares could potentially start trading at ₹738, translating to an impressive expected return of approximately 53.75% for investors. However, investors are reminded that grey market prices can fluctuate significantly.
Company Insights and Financials
PN Gadgil Jewellers is recognized as the second-largest organized jeweler in Maharashtra based on store count. As of December 2023, the company operates 33 locations in Maharashtra and Goa, along with one international store in the United States. The company’s financial performance has shown positive trends, with a net profit increase of 34.8%, reaching ₹23.7 crore in FY 2023. Despite a 76.4% revenue growth to ₹4,507.5 crore, the company’s operating margins have been impacted by rising input costs, resulting in a decrease of 1.63% to 2.72% during the same period. In the first half of FY 2024, from April to September, PN Gadgil recorded a net profit of ₹43.75 crore on revenues of ₹2,627.8 crore, indicating a promising trajectory.
