PN Gadgil Jewellers IPO Day 2: Check Subscription Status, GMP Today, Recommendations

PN Gadgil Jewellers IPO: The initial public offering of PN Gadgil Jewellers Ltd, which opened on Tuesday for public subscription, has received over five times subscription so far. The price band of the Rs 1,100-crore IPO has been fixed at Rs 456 to Rs 480 apiece. Till 2:40 pm on the second day of bidding on Wednesday, the IPO received bids for 8,82,32,014 shares against 1,68,85,964 shares on offer, translating into a 5.23 times subscription.

The portion for non-institutional investors got booked 11.17 times and the quota for Retail Individual Investors (RIIs) received 5.64 times subscription. The Qualified Institutional Buyers (QIBs) part got subscribed 5 per cent.

The IPO will be closed on Thursday, September 12. Its allotment will be finalised on September 13, while its share listing is scheduled to take place on September 17.

PN Gadgil Jewellers IPO GMP Today

According to market observers, unlisted shares of PN Gadgil Jewellers Ltd are trading Rs 258 higher in the grey market than its issue price. The Rs 258 grey market premium or GMP means the grey market is expecting a 53.75 per cent listing gain from the public issue. The GMP is based on market sentiments and keeps changing.

‘Grey market premium’ indicates investors’ readiness to pay more than the issue price.

PN Gadgil Jewellers IPO: Analysts’ Recommendations

Most analysts have given a ‘subscribe’ rating to the IPO on the back of its business outlook and well-established brand.

Granting a ‘subscribe’ rating, Canara Securities in its IPO note said, “P N Gadgil Jewellers is a well-established name in the jewellery sector, known for its strong presence in Maharashtra with 38 stores, including one in the USA. The company also boasts a vast inventory with over 38,000 SKUs. They are also the fastest growing jewellery brand amongst the key organised jewellery players in India, based on the revenue growth between fiscal 2022 and fiscal 2024.”

P N Gadgil Jewellers’ EBITDA has nearly doubled from Rs 141.98 crore in FY22 to Rs 277.42 crore in FY24, showcasing the company’s ability to scale its operations profitably. Ebitda stands for earnings before interest, tax, depreciation and amortisation.

Another brokerage firm Anand Rathi said, “On Valuation parse, at the upper price band the company’s implied market cap is around Rs 65130 Mn valuing at PE of 42.2 times for FY24. Looking at the company’s stable and growing profits and returns ratios we believe that this issue may be considered for its long term growth. Hence we give ‘SUBCRIBE for LONG TERM’ rating to this IPO.”

Brokerage Nirmal Bang in its IPO said, “In FY24, P N Gadgil’s operating margin stood at 4.5% which are lowest in the industry. The company is strategically aiming to boost its profitability by focusing on leveraging economies of scale to reduce costs and enhancing its revenue share of studded jewellery sales. Overall marketing expenses are also to be maintained in the range of 0.6-0.7% of revenue. Despite lower margins, the company has been able to generate strong return ratios, such as ROE of 28.9% and ROCE of 25.7% in FY24 supported by efficient operations which are best in the industry. The issue is valued at P/E of 42.2x to FY24 EPS which is available at discount when compared with industry average of 70x. Thus, we recommend SUBSCRIBE to the issue.”

Apart from this, other major brokerage firms including Stoxbox, BP Wealth, Swastika and Choice, have also given a ‘Buy’ call to the IPO.

PN Gadgil Jewellers IPO: Anchor Investment

The company raised Rs 330 crore from anchor investors, ahead of the IPO.

PN Gadgil Jewellers IPO: More Details

The initial public offering (IPO) will conclude on September 12. The price band for the offer has been fixed at Rs 456-480 per share.

The Maharashtra-based company’s IPO is a combination of a fresh issue of equity shares worth up to Rs 850 crore and an offer for sale (OFS) of equity shares to the tune of Rs 250 crore by promoter SVG Business Trust.

At present, SVG Business Trust holds a 99.9 per cent stake in PN Gadgil Jewellers.

Of the fresh issue proceeds, Rs 393 crore will be utilised for the funding of expenditure towards setting up 12 new stores in Maharashtra, Rs 300 crore for payment of debt, besides a portion will also be used for general corporate purposes.

PN Gadgil Jewellers Ltd offers a wide range of precious metal/jewellery products including gold, silver, platinum and diamond jewellery, across various price points and designs.

The company’s products are primarily sold under its flagship brand, ‘PNG’, and various sub-brands, through multiple channels, including 39 retail stores (as of July 31, 2024) and various online marketplaces, including websites.

Motilal Oswal Investment Advisors Ltd, Nuvama Wealth Management Ltd and BOB Capital Markets Ltd are the book-running lead managers to the issue.