The public issue of PN Gadgil Jewellers, which opened for subscription on Tuesday and will conclude on September 12, received significant interest from investors on Day 1 of its bidding process, receiving a subscription of nearly two times.
The Rs 1,100 crore IPO of PN Gadgil Jewellers includes a fresh issue of Rs 850 crore and an offer-for-sale (OFS) of up to 52,08,333 equity shares amounting to Rs 250 crore by its promoter entity SVG Business Trust.
The company aims to utilize the net proceeds from the issue for funding expenditures for setting up new stores, repayment of debt and general corporate purposes.
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The company has grown to 33 stores, including 32 stores across 18 cities in Maharashtra and Goa and one store in the United States with a total retail space of approx 95,885 sq. ft. All stores are operated and managed by the company, with 23 stores owned by the company and 10 stores operated by franchisees under the FOCO (franchisee-owned and company-operated) model.
PN Gadgil Jewellers IPO Subscription Status
The subscription rate was led by non-institutional investors (NIIs) who subscribed to the issue by 3.27 times, followed by retail investors, booking the issue by 2.61 times. However, the portion of qualified institutional buyers (QIBs) saw a subscription of a mere 0.01 times the shares reserved for the category.
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The company has booked 50 per cent of the shares for QIBs, 15 per cent for non-institutional investors and 35 per cent for retail investors.
PN Gadgil Jewellers IPO GMP
The shares of PN Gadgil Jewellers were commanding a price of Rs 230 in the grey market, indicating a premium of 48 per cent on the issue price.
Ahead of the issue, the jewellery company raised Rs 330 crore from anchor investors by allotting 68.74 lakh shares to 25 anchor investors ahead of the issue opening on Tuesday.
The shares were allotted at the upper end of the price band of Rs 480 per share. Out of the total anchor book, around 33.54 lakh shares were allocated to 10 domestic mutual funds through 18 schemes.
PN Gadgil Jeweller IPO Review
Analysts at Anand Rathi Research suggest that looking at the company’s stable and growing profits and returns ratio the issue should be considered for its long-term growth. The brokerage has given a “Subscribe for Long term” rating to the PN Gadgil Jewellers IPO.
According to the brokerage, as a traditional player, the company runs customer-oriented incentives and loyalty schemes. India is the second largest consumer of gold jewellery and retail market is expected to grow at a CAGR of 16 per cent over FY23-28 with the rising share of organised players. Moreover, the company plans to further expand its stores network by opening 12 new stores in Maharashtra by fiscal 2026, the establishment of all of which is proposed to be financed through the proceeds.
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PN Gadgil Jewellers is a leading player in the organised jewellery sector in Maharashtra, one of India’s largest markets for BIS-registered jewellery outlets.
On the valuation front, at the upper price band, the company’s implied market cap is around Rs 6,513 crore, valuing it at a PE of 42.2 times for FY24.
SBI Securities says PN Gadgil Jewellers is expected to save Rs 31 crore from finance cost post repayment of debt from the proceeds of the issue and is planning to utilize Rs 393 crore to open 12 new stores in FY25 and FY26.
“It is also set to capitalize on the jewellery market growth trend. We recommend subscribing to the issue for a long-term investment horizon," the brokerage said.
