Kolkata-based jewellery retailer Senco Gold's IPO opened for subscription on Tuesday, July 4, 2023, and will close on July 6. The issue was subscribed 45% so far on the first day. Shares of the company are likely to be listed on both BSE and NSE on July 14
Ahead of the stake sale, Senco Gold mobilised Rs 121.5 crore from anchor investors. The anchor round saw participation of marquee investors like Nippon MF, White Oak, Jupiter asset management, Bandhan MF and 3P India Equity Fund that is owned by star investor Prashant Jain. This is the first IPO investment for 3P India Equity Fund, which picked up 9.22% of the anchor investor portion
The price band for Senco Gold IPO has been fixed at Rs 301-317 per share. The company has sought a market capitalisation of Rs 2,351-2,462 crore at the said price band range. The IPO comprises a fresh issue of equity shares aggregating up to Rs 270 crore and an offer-for-sale (OFS) of equity shares worth Rs 135 crore
Senco Gold IPO shares were commanding a grey market premium (GMP) of Rs 55 on Tuesday. Half of the Senco Gold issue size is reserved for qualified institutional buyers (QIBs), 15% for HNIs (non-institutional investors) and the rest 35% for retail investors. Of the QIB, 60% is reserved for anchor investors
For Senco Gold IPO, investors can bid for a minimum of 47 equity shares and in multiples of 47 shares thereafter, which means the minimum investment by retail investors in the issue would be Rs 14,899 per lot, while the maximum would be Rs 1,93,687 for 13 lots as their investment cannot exceed Rs 2 lakh
Senco Gold is the largest organised jewellery retail player in the eastern region of India based on the number of stores. It primarily sells gold and diamond jewellery, apart from jewellery made of silver, platinum and precious and semi-precious stones. It has a team of 20 designers and 170 experienced karigars. It sells its products under the brand Senco Gold & Diamonds through multiple channels, including its owned 75 showrooms and 61 franchisee showrooms as of March 2023
Senco recorded a nearly 23% increase in consolidated profit for FY22 at Rs 158.5 crore on revenue of Rs 4,077.4 crore, which grew by 15.35% compared to the previous year. The net profit margin has grown to 3.9% in FY23, from 3.7% in FY22. On the operating front, EBITDA rose by 14.2% to Rs 316.6 crore and the operating margin came in at 7.76% for FY23 against 7.84% in the previous year
Suvankar Sen & his family and their trusts (Jai Hanuman Shri Siddhivinayak Trust and Om Gaan Ganpataye Bajrangbali Trust) are the promoters of Senco Gold, owning 76.92% shareholding in the company. The rest of the stake is held by investors SAIF Partners India IV (17.20%) and Oman India Joint Investment Fund II (OIJIF II, 3.85%), which invested in the company in 2014 and 2022, respectively
Ranjana Sen, mother of Suvankar Sen, is Chairperson and Whole-Time Director on the board, while Suvankar Sen is the MD and CEO and his wife Joita Sen is a Whole-Time Director on the board. Vivek Kumar Mathur (a non-Executive Nominee Director) from SAIF Partners PE is on the board. Sanjay Banka is the CFO, and Surendra Gupta is the Company Secretary & Compliance Officer
Select brokerage firms are positive on the issue and suggest investors to subscribe for it citing the growth potential, strong market share, sound financial performance and structural shift. However, others believe that the issue is aggressively priced, leaving limited upside potential on the table for investors
"At a higher price band, Senco is commanding a P/E multiple of 13.9 times (on FY23 EPS on upper price band), which is lower than the peer average. Thus, the IPO is attractively priced. Hence, based on current performance, we assign 'subscribe for listing gain' rating to the issue," said SMIFS Research
"As the diamond jewelry market is relatively unorganized, expansive product offerings and the plans to venture into other regions in the country to improve its brand recall and customer base would take some more time. Market growth provides an opportunity for expansion going ahead. Current valuation leaves limited upside. We believe it is more or less fairly valued," said Reliance Securities
At the upper price band of Rs 317, Senco Gold is available at a P/E of 15.5x its FY23 earnings, which is lower than industry peers' valuations, Geojit Financial Services said, while assigning a "subscribe" rating to the offer. BP Equities also has a 'Subscribe' rating on Senco Gold IPO as it believes that the issue is fairly valued. Canara Bank Securities has 'recommended the issue for Listing gains.'
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