PN Gadgil IPO subscribed 41 times on Day 3 so far; QIBs portion booked over 79x

The initial public offering (IPO) of PN Gadgil continued to attract a strong response from the investors during the third and final day of the bidding process, as QIBs joined the bidding party. The issue was overall subscribed more than two times during the first day of the bidding, while ended the day two with about 7 times 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 69,54,81,280 equity shares, or 41.19 times, compared to the 1,68,85,964 equity shares offered for the subscription by 3.10 pm on Thursday, September 12. The three-day bidding for the issue, which opened on Tuesday, September 12, concludes today.
 

The allocation for qualified institutional bidders (QIBs) was subscribed 79.08 times, while the portion reserved for non-institutional investors (NIIs) saw a subscription of 51.38 times. However, the quota set aside for retail investors was subscribed 15.17 times 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 300-310 per share in the unofficial market, suggesting a listing pop of about 65 per cent for the investors. The GMP stood at Rs 265-270 a day ago.
 

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.
 

PNGJL is the second-largest organized retail jewellery player in Maharashtra by store count. It is the fastest-growing jewellery brand among major organized players in India. t The company operates eight sub-brands that offer gold, diamond, and platinum jewellery. The expansion of stores and the company’s strong brand legacy have positively impacted its business, said Choice Broking.
 

"PNGJL is asking for an EV/sales ratio of 1 times, which is at a discount to peers. Its presence in Maharashtra helps strengthen its brand recognition and expand into Tier II and Tier III cities in western India, where organized retail is less developed. By increasing its store locations in these areas, the company aims to enhance both its business and profitability" it said with a 'subscribe' tag.
 

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 Jewellers is a leading organized gold jeweller retailer prominent in Maharashtra. Over FY22-24, the company’s revenue, Ebitda and APAT has grown at a CAGR of 54.6 per cent, 55.5 per cent and 63.7 per cent, respectively. In FY24, the company generates highest revenue per store of Rs 1,567 vs listed peer’s average of Rs 220, said Indsec Research.
 

"We are optimistic on the growth potential of the business given its track record of performance and growth, new store additions, make-to-order service which comes with high margin and improving sentiments of consumers post rationalization of custom duty on gold import by government. We thereby assign a 'subscribe' rating to the IPO," it said.
 

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.