PN Gadgil IPO booked 4 times on Day 2 so far; HNI portion booked over 7x

The initial public offering (IPO) of PN Gadgil continued to attract a decent response from the investors during the second of the bidding process, thanks to bidding from HNI and retail investors. The issue, which had kicked off on Tuesday, September 10, was overall subscribed more than two times during the first day of the bidding.
 

The Pune-based PN Gadgil is selling its shares in the price band of Rs 456-480 apiece. Investors can apply for a minimum of 31 shares and its multiples thereafter. It is looking to raise Rs 1,100 crore via IPO, which includes a fresh share sale of Rs 850 crore, and an offer-for-sale (OFS) of up to 52,08,333 equity shares.
 

According to the data, the investors made bids for 6,57,36,647 equity shares, or 3.89 times, compared to the 1,68,85,964 equity shares offered for the subscription by 12.25 pm on Wednesday, September 11. The three-day bidding for the issue will conclude on Thursday, September 12.
 

The allocation for non-institutional investors (NIIs) was subscribed 7.46 times, while the portion reserved for retail investors saw a subscription of 4.57 times. However, the quota set aside for qualified institutional bidders (QIBs) was subscribed merely three per cent as of the same time.
 

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 grey market premium of PN Gadgil has remained firm amid the volatility in the broader markets. Last heard, the company was commanding a premium of Rs 255-265 per share in the unofficial market, suggesting a listing pop of about 55 per cent for the investors. The GMP stood below Rs 200 per share before it opened for bidding.
 

Brokerage firms are mostly positive on the issue suggesting to subscribe it for a long term citing its strong presence in Maharashtra, experienced management, sound financial track record and expansion plans. However, rich valuations, fluctuations in the gold prices, high working capital needs and geographic concentration are the key risks for the business.
 

PN Gadgil Jewellers is a jewellery retailer in Maharashtra. As a traditional player, the company runs customer-oriented incentives and loyalty schemes. India is the second largest consumer of gold jewellery and the retail market is expected to grow at 16 per cent CAGR over FY 23-28 with the rising share of organised players, said Anand Rathi Research.
 

The rise in gold prices over the past years has pushed the retail demand for gold. It is coming with the public offer amid retail rush for gold during festive and beginning of wedding seasons. It will command a marketcap is around Rs 6,513crore valuing at PE of 42.2 times for FY24, it said with a 'subscribe for long term' citing its stable and growing profits and returns ratios.
 

For the year ended on March 31, 2024, PN Gadgil reported a net profit Rs 154.34 crore with a revenue of Rs 6,119.1 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.
 

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.  It 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.
 

PN Gadgil plans to utilize IPO funds for further expansion. The company has demonstrated consistent growth in both revenue and profit, with a recent improvement in margins after a temporary setback, said Swastika Investmart in its IPO note.
 

"The IPO's P/E valuation is considered fair. While the company's overall outlook is positive, investors should be aware of potential fluctuations in listing gains due to the competitive IPO market. Long term investors may consider subscribing to the IPO," it added.
 

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.