Senco Gold IPO: Senco Gold is a pan-Indian retailer of jewellery with a significant presence in eastern India. The IPO subscription period will begin on July 4 and end on July 6.
The IPO will raise as much as 405 crore through a combination of a fresh issue worth 270 crore and an offer for sale by SAIF Partners.
The net proceeds from the new offering will be allocated to working capital and general corporate purposes.
Senco Gold of Kolkata, one of the largest organised jewellery retail operators in eastern India, has joined the IPO rush.
The company’s initial public offering (IPO) begins accepting subscriptions on July 4 and closes on July 6. The offer price range has been set between 301 and 317 per equity share. Bids are accepted for a minimum of 47 equity shares and in multiples of 47 thereafter.
The IPO will raise as much as 405 billion through the sale of equity shares with a par value of 10. The offer consists of a fresh issue of up to 270 crore worth of equity shares and an offer for sale by SAIF Partners India IV Limited of up to 135 crore.
The procurement period for the anchor investor begins on Monday, July 3, 2023.
Approximately fifty percent of the offer will be allocated proportionally to Qualified Institutional Buyers (QIBs). The vendors have the discretion to allocate up to 60% of the QIB portion to anchor investors.
In addition, 15% of the offer shall be allocated to non-Institutional applicants, and 35% shall be allocated to retail investors.
The company intends to use the net proceeds from the offering to fund working capital needs and for general corporate purposes.
One of the greatest financial performances among competitors.
Senco Gold is a pan-Indian jeweller that sells gold, diamond, silver, platinum, precious and semiprecious stones, and other metals.
In addition, it sells costume jewellery, gold and silver coins, and silverware. Its price points range from approximately 2,000 to 5 lakh to maximise its consumer base.
It claims to offer a wide selection of gold and diamond jewellery, with a catalogue of approximately 1,900,000 designs.
According to the company, the majority of its products are “designed and manufactured in-house by its designers in close collaboration with skilled local craftsmen in Kolkata and across the country.” Additionally, machine-made lightweight jewellery is produced at this facility.
Senco operates 136 showrooms in 96 cities and 13 states across India. According to the company’s red herring prospectus, some of its franchisee showrooms are located in Tier-I cities, which gives it increased access to Tier-II areas.
It asserts that its ‘franchise’ model promotes asset-light growth, reduces capital expenditures, and enables more rapid expansion.
According to an IPO note by SMIFS, the IPO is priced competitively, with a price-to-earnings multiple of 13.9x at its upper price band – lower than its peer average.
“Senco is well positioned to benefit from the anticipated industry growth rate and the structural transition from unorganised to organised sector. SMIFS gave the company a ‘Subscribe’ rating for listing gains, citing one of the strongest financial performances among its competitors.
hazard variables
The company stated in its RHP that its industry is extremely competitive and that it risks losing a significant market share. It added that fluctuations in the market price of gold and diamonds can impact its income, profitability, and operational scope.
It adds that an inability to meet working capital requirements on terms that are commercially acceptable can have a negative impact on operations.
The corporation has initiated six criminal proceedings, while it is the target of one such action. Additionally, there are 44 tax proceedings against the business. Its promoters are the subject of one criminal proceeding and four tax proceedings.
In its RHP, the company stated, “We were subject to a’search and seizure’ operation by the income tax department, which resulted in taxation and criminal proceedings being initiated against our company and our individual promoter.”
In addition, the company requires specific approvals, permits, and licences in the normal course of business, and any failure or delay in obtaining or renewing them could have a negative impact on its operations.
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