PN Gadgil Jewellers has announced a price band of ₹456-480 per share for its upcoming
PN Gadgil Jewellers, one of Maharashtra’s leading jewellery brands, has announced a price band of ₹456-480 per share for its upcoming initial public offering (IPO), which aims to raise ₹1,100 crore. The IPO will be available for subscription from September 10 to September 12, 2024, with anchor investor bidding starting on September 9. This eagerly anticipated IPO is set to attract significant interest from both institutional and retail investors.
IPO Structure and Purpose
The IPO consists of a fresh equity issue of ₹850 crore and an offer for sale (OFS) amounting to ₹250 crore. The OFS will involve the promoter SVG Business Trust divesting a portion of its equity stake in the company. The funds raised through this offering are earmarked for several strategic initiatives:
Expansion Plans: A significant portion of the proceeds will be utilized to set up 12 new stores in Maharashtra, strengthening the company’s footprint in its core market.
Debt Repayment: Part of the funds will be allocated to repay existing debt, thereby improving the company’s financial leverage and reducing interest expenses.
General Corporate Purposes: The remaining amount will be used for various corporate activities to enhance operational efficiency and support growth strategies.
PN Gadgil Jewellers: A Growing Leader in the Jewellery Market
As of January 2024, PN Gadgil Jewellers has emerged as the second-largest organized jewellery retailer in Maharashtra by store count. The company has been a standout performer in the Indian jewellery market, characterized by its rapid growth and robust financial performance:
Expansion and Store Presence: PN Gadgil has expanded its network to 33 stores, with 32 stores located in Maharashtra and Goa, and one store in the United States. The combined retail area spans approximately 95,885 square feet, underscoring the company’s commitment to a strong physical presence.
Digital Engagement: In March 2022, the company launched the “PNG Jewellers” mobile app to enhance customer engagement. The app provides customers with timely updates on new designs, collections, and exclusive offers, strengthening PN Gadgil’s digital presence and aligning with modern consumer trends.
Financial Performance and Market Position
PN Gadgil Jewellers has demonstrated remarkable growth in recent years, positioning itself as one of the fastest-growing organized jewellery brands in India. Key financial highlights include:
EBITDA Growth: Between FY21 and FY23, the company reported a 56.5% increase in EBITDA, reflecting its operational efficiency and effective cost management.
Revenue and Profit Growth: In FY23, PN Gadgil’s revenue surged by 76% year-on-year to ₹4,507 crore, while the profit after tax (PAT) grew by 35% to ₹94 crore. For the six-month period ending September 2023, the company reported a revenue of ₹2,628 crore and a PAT of ₹4.37 crore.
Revenue per Square Foot: PN Gadgil achieved the highest revenue per square foot among its peers in FY23, highlighting the efficiency of its retail operations and strong customer demand.
Use of IPO Proceeds
The proceeds from the IPO will be strategically deployed to support PN Gadgil’s growth ambitions:
Store Expansion: The company plans to use a substantial portion of the funds to open 12 new stores across Maharashtra. This expansion will strengthen its market position in the region and cater to the growing demand for quality jewellery.
Debt Repayment: By reducing its debt burden, PN Gadgil aims to enhance its financial stability and create more room for future investments.
Corporate Growth: The remaining funds will be used for general corporate purposes, which may include marketing, brand building, and technological advancements to stay competitive in the evolving jewellery market.
IPO Managers and Investor Interest
The IPO is being managed by leading investment advisors and managers:
Motilal Oswal Investment Advisors
Nuvama Wealth Management (formerly Edelweiss Securities)
BOB Capital Markets
These book-running lead managers are well-regarded in the market, adding credibility to the IPO and attracting a diverse pool of investors, including institutional and retail participants.
Market Outlook and Strategic Advantages
PN Gadgil Jewellers is entering the public market at a time when the Indian jewellery sector is poised for significant growth, driven by rising disposable incomes, changing consumer preferences, and a shift towards organized retail. The company’s strategic focus on expanding its store network, coupled with its digital initiatives, positions it well to capitalize on these market trends.
A Promising Investment Opportunity
PN Gadgil Jewellers’ upcoming IPO presents a promising investment opportunity, supported by the company’s strong market position, robust financial growth, and strategic expansion plans. With a clear focus on scaling operations, reducing debt, and leveraging digital engagement, the company is well-positioned to continue its growth trajectory in the coming years. Investors will be closely watching the IPO’s subscription levels and the company’s performance post-listing, as PN Gadgil embarks on its journey in the public markets.
