PN Gadgil Jewellers will launch its initial public offering (IPO) of PN Gadgil Jewellers opens for bidding on Tuesday, September 10. The jewellery player is offering its shares in the range of Rs 456-480 apiece, where investors can apply for a minimum of 31 equity shares and its multiples thereafter. The issue can be subscribed until Thursday, September 12.
PN Gadgil Jewellers offers a wide range of precious metal/jewelry products including gold, silver, platinum, and diamond jewelry under its brand name 'PNG' in various price ranges and designs. The Pune-based company, incorporated in 2013, offers its customers the option of having jewelry made to measure.
The Rs 1,100 crore- IPO of PN Gadgil Jewellers includes a fresh share sale of Rs 850 crore and an offer-for-sale (OFS) of up to 52,08,333 equity shares amounting to Rs 250 crore by its promoter entity SVG Business Trust. The net proceeds from the issue shall be utilized towards funding expenditure for setting up new stores; repayment of debt and general corporate purposes.
Ahead of its IPO, PN Gadgil Jewellers raised Rs 330 crore from 33 anchor investors as it allocated 68.75 lakh shares at Rs 480 apiece. Anchor book includes names like Citigroup Global Markets Mauritius, Societe Generale, Goldman Sachs (Singapore), Troo Capital, The Jupiter Global Fund, Tata Mutual Fund (MF), Axis MF, Mirae Asset MF, HDFC MF, Bandhan MF and more.
PN Gadgil has 8 sub-brands offering gold jewelry collections for various occasions, namely Saptam, Swarajya, Rings of Love, The Golden Katha of Craftsmanship, Flip, Litestyle, Pratha and Yoddha, two sub-brands offering diamond jewelry collections, namely Eiina and PNG Solitaire, and two sub-brands offering platinum jewelry collections, namely Men of Platinum and Evergreen Love.
The company had grown to 33 stores, including 32 stores across 18 cities in Maharashtra and Goa and one store in the US with a total retail space of approximately 95,885 sq. ft. All stores are operated and managed by the company, with 23 stores owned by the company and 10 stores operated by franchisees under the FOCO (franchisee-owned and company-operated) model.
For the six months ended on September 30, 2023, the company reported a net profit Rs 43.75 crore with a revenue of Rs 2,631.15 crore. The company's net profit came in at Rs 93.7 crore with a revenue of Rs 4,559.31 crore for the financial year ending on March 31, 2023.
PN Gadgil Jewellers has reserved 50 per cent of the net issue for the qualified institutional bidders, while 15 per cent of the shares have been reserved for non-institutional investors. Retail investors will have 35 per cent of the net offer reserved for them.
Motilal Oswal Investment Advisors, Nuvama Wealth Management and BoB Capital Markets are the book running lead managers of the PN Gadgil Jewellers IPO, while Bigshare Services is the registrar for the issue. Shares of the company shall be listed at the bourses on Tuesday, September 17. Here's what brokerage firms said about the IPO of PN Gadgil Jewellers:
Canara Bank Securities Rating: Subscribe PN Gadgil Jewellers known for its strong presence in Maharashtra with 38 stores, including one in the USA. The company also boasts a vast inventory with over 38,000 SKUs. It plans to add 12 new stores in Maharashtra over the next two years, followed by expansion into neighboring states, aiming to reach 120 stores in 6-7 years, said Canara Bank Securities.
"PN Gadgil P/E ratio is 22.23 times, and P/B ratio is 10.60 times, which suggests a reasonable valuation compared to peers. Ebitda has nearly doubled from Rs 141.98 crore in FY22 to Rs 277.42 crore in FY24, showcasing the company's ability to scale its operations profitably. We recommend to 'subscribe' the IPO for long-term gains," it said.
DR Choksey Rating: Subscribe PN Gadgil Jewellers is operating in a steadily expanding sector driven by cultural significance, investment appeal, and a growing middle class, the company is well-positioned to benefit from the industry’s growth. The rise in organized retail, fueled by increased disposable incomes and a preference for branded jewellery, further supports this trend, said DR Choksey Finserv.
"It leads many competitors in revenue per square foot and Ebitda growth, with strong working capital management enhancing scalability and profitability. Currently valued at an adjusted PE ratio of 42 times, PN Gadgil is trading at a discount compared to its peers. We assign a 'subscribe' rating to the IPO," it said.
SBI Securities Rating: Subscribe PN Gadgil is valued at FY24 P/E multiple of 42.2 times based on the upper price band on the post-issue capital. The company is amongst the fastest growing organised jewellers in Maharashtra and operates under the legacy of the ‘PN Gadgil’ brand. Its revenue, Ebitda and PAT grew at a CAGR of 54.6 per cent, 55.5 per cent and 49.0 per cent, respectively, said SBI Securities.
"PNGJL is expected to save Rs 31 crore from finance cost post repayment of debt from the proceeds of the issue and is planning to utilize Rs 393 crore to open 12 new stores in FY25 and FY26. It is also set to capitalize on the jewellery market growth trend. We recommend subscribing to the issue for a long-term investment horizon," it added.
Ventura Securities Rating: Subscribe Their product offerings cover the unique aesthetics and designs of traditional jewellery for special occasions such as weddings, engagements and festivities, as well as modern and functional jewellery designs for everyday wear purposes. Their products are primarily sold under their flagship brand, ‘PNG’, and various sub-brands, through multiple channels, said Ventura Securities.
It has been in business for over 19 decades and has around an aggregate retail area of approximately 108,282 sq. ft. As on July 31, 2024, It has eight sub-brands which cater to gold jewellery collections for different occasions, two sub-brands which cater to the diamond jewellery collections and two sub-brands which cater to platinum jewellery collections, it said with a 'subscribe' tag.