Introduction: The much-awaited Initial Public Offering (IPO) of P.N. Gadgil Jewellers (PNG Jewellers) opened for public subscription on September 10, 2024, and will close on September 12, 2024. The company, one of the leading jewellery retailers in India, aims to raise funds for debt repayment and store expansion, marking an exciting opportunity for investors.
Key Details of the IPO:
- IPO Price Band: ₹456 to ₹480 per share.
- Lot Size: 31 equity shares per lot.
- Total Issue Size: ₹1,100 crore. This includes:
- Fresh Issue: ₹850 crore.
- Offer for Sale (OFS): ₹250 crore by SVG Business Trust.
- Listing Date: Shares are expected to list on September 18, 2024, on both BSE and NSE.
- Grey Market Premium (GMP): As of today, the shares are trading at a ₹230 premium in the grey market, suggesting a potential listing price of ₹710, which is approximately 47% above the upper price band.
Company Background: PNG Jewellers is the second-largest organised jewellery retailer in Maharashtra, with 39 stores spread across 21 cities in India and one store in the USA. The company plans to utilise the funds raised for debt repayment (₹300 crore) and to open 12 new stores in Maharashtra by FY26, enhancing its growth potential. The company operates under a mixed model, with company-owned and franchisee-run stores.
Objective of the IPO: The primary purposes of the IPO are:
- Debt Repayment: ₹300 crore will be allocated for this purpose.
- Expansion: ₹387 crore is earmarked for opening new stores, primarily in Maharashtra, which is PNG Jewellers’ stronghold.
- General Corporate Purposes: Remaining funds will be used for day-to-day operations.
Should You Invest? The company’s consistent growth in revenue and profitability over the years positions it well for future expansion. Between FY2021 and FY2023, PNG Jewellers saw a significant EBITDA growth of 39.78%, reflecting strong operational performance. The IPO’s grey market premium suggests strong investor interest, but as always, prospective investors should assess their risk tolerance and financial goals before investing.
Final Thoughts: The P.N. Gadgil Jewellers IPO offers an attractive investment opportunity, especially for those looking to benefit from the robust growth of the Indian jewellery market. With its solid business model and expansion plans, PNG Jewellers is poised for further success.
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