RBZ Jewellers Jewellers IPO opens for subscription; key things to know

RBZ Jewellers' initial public offering (IPO) opens for bidding on Tuesday, December 19. The company will be offering shares within the range of Rs 95-100 each, with a lot size of 150 equity shares. The bidding for the issue will conclude on Thursday, December 21.

RBZ Jewellers, established in April 2008, is an Indian gold jewellery manufacturer specializing in crafting antique designs. The company's repertoire includes a diverse range of antique gold jewellery featuring jadau, meena, and kundan work, sold on both wholesale and retail platforms.

The company is looking to raise Rs 100 crore through its IPO, involving entirely a fresh share sale of 1,00,00,000 equity shares. The net proceeds from the IPO will be directed towards fulfilling working capital requirements and general corporate purposes.

Ahmedabad-based RBZ Jewellers operates its retail showroom under the brand name 'Harit Zaveri', whose wholesale clientele comprises esteemed national, regional, and local family jewellers across 19 states and 72 cities in India. The company's manufacturing facility is located in Ahmedabad.

RBZ's diverse jewellery collections comprising different manufacturing techniques and varieties, a strong brand presence in the Indian jewellery industry, and a wide reach and presence across India have helped it to grow its business successfully. The issue is valued at a P/E of 13.4 times based on FY23 earnings, which is fairly valued, said StoxBox with a 'subscribe' rating.

RBZ Jewellers has garnered Rs 21 crore from anchor investors ahead of its IPO. The company allocated 21 lakh equity shares at Rs 100 per share to anchor investors including PGIM India Fund, BOFA Securities and Negen Undiscovered Value Fund. The company further informed that no shares were allocated to mutual funds.

For the period ending September 30, 2023, RBZ Jewellers reported a net profit of Rs 12.09 crore, accompanied by a revenue of Rs 125.52 crore. In the financial year 2022-23, the company's net profit and revenue stood at Rs 22.33 crore and Rs 289.63 crore, respectively.

RBZ Jewellers manufactures and distributes gold jewelry, serving both wholesale and retail markets. The company's organized manufacturing infrastructure, geographical reach, and risk mitigation systems are promising strengths. RBZ Jewellers has demonstrated consistent financial growth, reflected in its rising top- and bottom-line figures, said Swastika Investmart.

"However, potential investors should carefully consider key risks such as gold price volatility, significant dependence on a limited number of clients, the absence of formal arrangements with in-house artisans, and intense competition. The IPO valuation appears fair on the surface, but the aforementioned risks necessitate a cautious approach," it added with recommendations this IPO only for high-risk investors.

The company has reserved half of the issue or 50 per cent for the qualified institutional bidders (QIBs), while retail investors will get 35 per cent of reservation in the net offer. Remaining 15 per cent of the shares shall be allocated towards non-institutional investors.

RBZ has established systems and procedures for various facets of its business and operations including order management, human resource management, finance and controls, management processes and risk management. As part of its quality control check, it strictly follows the hallmarking process for all its gold jewellery as per prescribed norms, said Capital Markets.

The company‘s manufacturing facility and showroom are located only in Ahmedabad, Gujarat. The operations of the company are vulnerable to intense competition amidst fragmented gems and jewellery industry. The margins of the company are susceptible to volatility in prices of gold and other precious metals, it added, suggesting the issue for only aggressive investors.

Arihant Capital Markets is the exclusive book running lead manager for the RBZ Jewellers IPO, and Bigshare Services serves as the registrar for the issue. The company's shares are expected to be listed on both BSE and NSE, with the listing date set for December 27, Wednesday.

Disclaimer: Business Today provides stock market news for informational purposes only and should not be construed as investment advice. Readers are encouraged to consult with a qualified financial advisor before making any investment decisions.

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