Kenrik Industries Limited, a company specializing in the manufacturing, wholesaling, and supplying of plain and studded gold jewellery and ornaments, is set to launch its Initial Public Offering (IPO) on April 29, 2025. The company is focused on traditional Indian jewellery, offering a wide range of products including rings, earrings, pendants, nose rings, bangles, necklaces, and wedding jewellery, all studded with precious and semi-precious stones like diamonds, rubies, and cubic zirconia.

Kenrik Industries IPO Details

Kenrik Industries is offering a fixed price IPO amounting to ₹ 8.74 Crores, consisting entirely of a Fresh Issue of 34.98 Lakh shares. The issue will be priced at ₹ 25 per share. The subscription period will begin on April 29, 2025, and close on May 6, 2025. The allotment of shares will be finalized on or around May 7, 2025, with shares listed on the BSE SME platform expected to be available for trading by May 9, 2025.

IPO Lot Size and Investment Requirements

The lot size for the IPO is 6,000 shares, with a minimum investment for retail investors set at ₹ 1,50,000 (for 6,000 shares). High-Net-Worth Individuals (HNIs) are required to invest in a minimum of 12,000 shares, amounting to ₹ 3,00,000. The share price of ₹ 25 per equity share values the company at a market capitalization of ₹ 31.24 Crores at the IPO price.

Grey Market Premium (GMP)

The current Grey Market Premium (GMP) for Kenrik Industries’ IPO stands at ₹ 0, indicating no expected listing gains in the grey market. However, investors should be cautious as trading in the grey market is unregulated and should not be relied upon for price discovery before the official listing on the stock exchange.

Subscription and Allotment Status

As of the final day of the subscription period on May 6, 2025, the IPO had been subscribed 1.95 times, indicating a moderate level of demand. Allotment status for investors will be made available on May 7, 2025, and can be checked through the Registrar’s website. Investors can verify their allotment status by entering their application number, PAN, or DP Client ID.

Objectives of the IPO

The funds raised through the IPO will be utilized for:

1. Meeting Working Capital Requirements – ₹ 656.25 Lakh

2. General Corporate Purposes – ₹ 180.00 Lakh

Financial Performance and Key Metrics

Kenrik Industries has demonstrated steady growth in its financial performance. The revenue for the fiscal year ending October 31, 2024, was ₹ 4,218.58 Lakh, compared to ₹ 7,097.46 Lakh in 2023. EBITDA for FY 2024 stood at ₹ 105.47 Lakh, with a Profit After Tax (PAT) of ₹ 78.19 Lakh. The company’s key metrics include:

• Pre-issue EPS of ₹ 1.21 and post-issue EPS of ₹ 0.87.

• Pre-issue P/E ratio of 20.66x and post-issue P/E ratio of 28.81x, compared to the industry P/E of 24x.

• Return on Capital Employed (ROCE) of 10.85% and Return on Net Worth (RoNW) of 8.62%.

IPO Review and Recommendation

Given the company's financial metrics and valuation, Kenrik Industries’ IPO appears to be fairly priced, with a P/E ratio higher than the industry average. The steady growth in revenue and profit over the past few years is promising, but the lack of listing gains indicated by the Grey Market Premium suggests limited short-term upside potential.

While the company has a solid reputation in the jewellery industry, its valuation and the moderate demand during the subscription period suggest that the IPO may not yield significant listing gains. Therefore, for investors looking for short-term gains, the IPO may not be an ideal option. For long-term investors, the steady performance and business fundamentals should be taken into consideration before making any investment decisions.

The Upcoming IPOs in this week and coming weeks are Virtual Galaxy Infotech, Wagons Learning.

The Current active IPO are Srigee DLM, Manoj Jewellers.

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