Kenrik Industries Limited, a company primarily engaged in manufacturing and supplying gold jewellery, is launching its Initial Public Offering (IPO) with a fresh issue of ₹8.74 Crores. The subscription period for the IPO opens on April 29, 2025, and will close on May 06, 2025. The allotment is expected to be finalized by May 07, 2025, and the shares will be listed on the BSE SME with a tentative listing date of May 09, 2025.

The price band for Kenrik Industries IPO is set at ₹25 per equity share. The market capitalization of the company at this price will be ₹31.24 Crores. The lot size of the IPO is 6,000 shares, with retail investors needing to invest a minimum of ₹1,50,000, while High-Net-Worth Individuals (HNIs) must invest in two lots (12,000 shares), amounting to ₹3,00,000.

Kenrik Industries focuses on traditional Indian jewellery, including handmade gold pieces studded with diamonds, rubies, cubic zirconia, and other precious and semi-precious stones. Their product portfolio includes rings, earrings, bracelets, chains, necklaces, bangles, and luxury wedding jewellery, catering to both domestic and international markets.

The company is led by promoters Nitinkumar Dalpatbhai Shah and Nihar Nitinbhai Shah, who bring a combined experience of 25 years in the gems and jewellery industry. Their leadership, paired with innovative business strategies and strong customer service, has positioned the company for growth.

Financial Overview: Kenrik Industries has shown consistent growth over the past few years. The revenues for the period ending October 31, 2024, stood at ₹4,218.58 Lakh. The company's profit after tax (PAT) for FY24 was ₹78.19 Lakh, showcasing a steady increase from previous years. EBITDA for the same period was ₹105.47 Lakh, reflecting improved operational efficiencies.

For FY24, Kenrik Industries reported a pre-issue earnings per share (EPS) of ₹1.21, which is expected to decrease to ₹0.87 post-issue. The company’s pre-issue price-to-earnings (P/E) ratio is 20.66x, while the post-issue P/E ratio stands at 28.81x. This is compared to the industry P/E ratio of 24x, indicating that the IPO is fully priced.

The company’s Return on Capital Employed (ROCE) for FY24 was 10.85%, with Return on Equity (ROE) at 9.01% and Return on Net Worth (RoNW) at 8.62%. These figures suggest moderate profitability and a stable financial position.

Kenrik Industries IPO Grey Market Premium (GMP): The Grey Market Premium (GMP) for the Kenrik Industries IPO is reported to be ₹0, suggesting no immediate price movement in the grey market. This indicates a cautious outlook from investors in terms of price discovery and potential listing gains. However, since the GMP is entirely driven by demand and supply in the unregulated grey market, it is not a reliable indicator for actual pricing.

Objectives of the IPO: The net proceeds from the IPO will be used for the following purposes:

1. Working Capital Requirements: ₹656.25 Lakh will be allocated to meet the working capital needs of the company, ensuring smooth business operations.

2. General Corporate Purposes: ₹180.00 Lakh will be used for general corporate purposes, including business expansion and strengthening the company’s operational capabilities.

IPO Allotment and Subscription Details: The subscription period for the IPO will close on May 06, 2025. As of the second day of the subscription period, the IPO was subscribed 0.53 times, indicating a moderate investor response. The IPO allotment will be finalized on May 07, 2025. Investors can check their allotment status on the registrar’s website by entering the application number, PAN, or DP Client ID.

Recommendation: Given the steady financial performance, but high valuation relative to industry peers, the Kenrik Industries IPO is considered fully priced. The company’s growth trajectory in the jewellery industry is promising, but the absence of a Grey Market Premium and relatively high P/E ratio could signal limited listing gains. Based on the current data, it is recommended to avoid the IPO for listing gains or long-term investment purposes.

Final Thoughts: Investors should carefully evaluate the financial health and market prospects of Kenrik Industries before making any investment decisions. While the company has a strong presence in the traditional gold jewellery sector, the IPO's pricing may not offer immediate listing gains, making it more suitable for investors with a long-term investment horizon and a preference for the jewellery industry.

The Upcoming IPOs in this week and coming weeks are Wagons Learning, Srigee DLM, Manoj Jewellers.

The Current active IPO are Kenrik Industries, Arunaya Organics.

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