PN Gadgil Jewellers Limited has emerged as a fast-growing player in India’s organized jewellery market, ranking as the second-largest jewellery retailer in Maharashtra by the number of stores as of January 2024. Known for its rapid growth between Fiscal 2022 and Fiscal 2024, the company has carved a significant niche in the sector, positioning itself as a brand of choice for consumers.

IPO Details

The PN Gadgil Jewellers IPO is a Book Built Issue valued at ₹1,100 Crores, consisting of a Fresh Issue of 17.70 lakh shares worth ₹850 Crores and an Offer for Sale of 5.20 lakh shares totaling ₹250 Crores. The IPO subscription period begins on September 10, 2024, and closes on September 12, 2024. The allotment is expected on September 13, 2024, and the shares will be listed on the BSE and NSE with a tentative listing date of September 18, 2024.

The price band for the IPO is set between ₹456 and ₹480 per share, with a minimum lot size of 31 shares. Retail investors must invest a minimum of ₹14,880, while High-Net-Worth Individuals (HNIs) are required to invest in 14 lots (434 shares), amounting to ₹208,320.

The book-running lead managers for the issue are Motilal Oswal Investment Advisors Limited, Nuvama Wealth Management Limited, and BOB Capital Markets Limited, while Bigshare Services Private Limited is the registrar.

Financial Performance and Valuation

PN Gadgil Jewellers has exhibited remarkable growth in recent years. The company’s revenue surged from ₹25,863.05 million in FY22 to ₹45,593.12 million in FY23, further increasing to ₹61,191.04 million in FY24. Its EBITDA rose from ₹1,419.83 million in FY22 to ₹2,774.26 million in FY24, while Profit After Tax (PAT) increased from ₹695.15 million in FY22 to ₹1,543.43 million in FY24. These figures demonstrate the company's consistent financial strength and resilience in a competitive market.

For investors, PN Gadgil Jewellers’ pre-issue EPS is ₹13.08, with a post-issue EPS of ₹11.37. The pre-issue P/E ratio stands at 36.69x, while the post-issue P/E ratio is 42.21x, which compares favorably against the industry average P/E ratio of 63.31x. Additionally, the company has achieved a Return on Capital Employed (ROCE) of 27.31% and a Return on Equity (ROE) of 28.88% in FY24, showcasing its profitability.

Grey Market Premium (GMP)

The Grey Market Premium (GMP) for PN Gadgil Jewellers is reportedly in the range of ₹290 to ₹310, indicating strong demand for the shares before listing. This premium suggests potential listing gains of 60% to 65%, although it is important to note that the Grey Market Premium is not an official indicator and should only be considered for educational purposes. The actual price discovery will take place once the shares are listed on the stock exchange.

Subscription Status

On the final day of the subscription period, PN Gadgil Jewellers IPO received robust demand, being subscribed 59.15 times by 4:00 PM on September 12, 2024. Investors can check the live subscription status on the BSE website for real-time updates.

Anchor Investors

The company raised ₹333 Crores from Anchor Investors at ₹480 per share. Key participants included HDFC Trustee Capital, Nippon Life India Trustee, and Axis Mutual Fund Trustee, among others. These prominent investors were allocated 68,74,999 equity shares from the Qualified Institutional Buyers (QIBs) portion, reinforcing confidence in the company's potential.

Allotment Process

The allotment for PN Gadgil Jewellers IPO is scheduled for September 13, 2024. Investors can check their allotment status online by visiting the Bigshare Services Private Limited website or using the following steps:

Visit the IPO allotment status page.

Select PN Gadgil Jewellers IPO from the dropdown menu.

Enter your application number, PAN, or DP Client ID.

Submit the information to view your allotment status.

Objectives of the Issue

The proceeds from the Fresh Issue will be allocated towards the following objectives:

₹3,925.68 million for the funding of 12 new stores in Maharashtra.

₹3,000 million for repayment or pre-payment of existing borrowings.

General corporate purposes.

Conclusion and Recommendation

PN Gadgil Jewellers IPO stands out as a promising investment opportunity, backed by strong financials and consistent revenue growth. The company’s expertise in the jewellery market, combined with strategic expansion plans, offers long-term growth potential. Given the attractive Grey Market Premium and fair IPO pricing, the issue appears favorable for both listing gains and long-term investment. However, as with any IPO, it is essential to consider your financial objectives and risk appetite before making investment decisions.

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