Divine Hira Jewellers Limited specializes in the design and marketing of premium 22 Karat gold jewelry. Based in Zaveri Bazar, Mumbai, one of India’s most vibrant jewelry markets, the company caters to wholesalers, showrooms, and retailers, offering a diverse range of gold jewelry that blends traditional artistry with modern elegance. Now, the company is launching an Initial Public Offering (IPO) to raise funds and further expand its operations.

The Divine Hira Jewellers IPO opens for subscription on March 17, 2025, and closes on March 19, 2025. The IPO will raise ₹ 31.84 Crores, consisting entirely of a Fresh Issue of 35.37 Lakh shares, priced at ₹ 90 per equity share. At the issue price of ₹ 90, the company’s market capitalization at the IPO price will be ₹ 117.42 Crores. The lot size for this IPO is 1,600 shares, requiring a minimum investment of ₹ 1,44,000 for retail investors. For High Net-Worth Individuals (HNIs), the minimum investment is 2 lots (3,200 shares), which would cost ₹ 2,88,000.

The Grey Market Premium (GMP) of this IPO is currently ₹ 0, indicating no premium in the unregulated market. The absence of GMP suggests there is no significant speculative interest in the IPO at this time. The GMP is based on demand and supply in the unorganized market and is not a reliable indicator of the IPO’s future performance. It is also crucial to note that real price discovery can only occur once the shares are listed on the NSE SME platform, with the tentative listing date set for March 24, 2025.

The company’s financial performance reflects steady growth in revenues and profits. For the period ending September 30, 2024, Divine Hira Jewellers reported revenues of ₹ 13,602.63 Lakhs with a Profit after Tax (PAT) of ₹ 249.83 Lakhs. The EBITDA for the same period was ₹ 407.58 Lakhs, indicating strong operational efficiency. Over the past few years, the company has shown a consistent increase in revenues, EBITDA, and PAT, underscoring its strong position in the gold jewelry market.

The pre-issue earnings per share (EPS) for FY24 is ₹ 1.56, while the post-issue EPS is expected to be ₹ 1.14. The P/E ratio is 57.69x pre-issue and 79.25x post-issue, which is relatively high compared to the industry P/E ratio of 99x. The company’s Return on Capital Employed (ROCE) for FY24 is 13.54%, and the Return on Equity (ROE) stands at 16.36%, indicating a healthy return on investments.

Despite the company’s steady growth, the Grey Market Premium (GMP) being 0 suggests limited short-term excitement surrounding the IPO. The absence of a premium combined with high valuation metrics may signal a lack of immediate listing gains. For those seeking short-term returns, the IPO may not present a significant opportunity.

The objectives of the IPO include using the net proceeds for prepayment or repayment of loans (₹ 300 Lakhs), funding working capital (₹ 1,900 Lakhs), and general corporate purposes (₹ 619.09 Lakhs). These funds will support the company’s operational needs and expansion plans, particularly in working capital management and debt reduction.

The company’s promoters, HIRACHAND PUKHRAJ GULECHA, with over 30 years of experience in the gems and jewelry industry, NIRAJ HIRACHAND GULECHA (10 years in gold ornaments business), and KHUSHBU NIRAJ GULECHA (5 years in jewelry designing), bring a wealth of industry knowledge to the company.

While the company shows consistent financial growth and strong management, the IPO pricing and absence of a GMP suggest that it might be a fairly priced IPO but with limited short-term listing gains. Investors focused on long-term growth in the gold jewelry market may consider this IPO a good option, while those looking for immediate returns might want to reconsider. The high P/E ratio reflects that the stock is priced at a premium, which may limit near-term upside potential.

The IPO allotment guide provides an easy method for investors to check their allotment status, and the Grey Market Premium should be considered as a minor indicator of potential price movements. With careful consideration of the company’s financial health and growth prospects, investors can make an informed decision about whether to participate in this IPO.

The Upcoming IPOs in this week and coming weeks are Super Iron Foundry, Paradeep Parivahan, Divine Hira Jewellers.

The Current active IPO is PDP Shipping & Projects.

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