Senco Gold IPO - Dates, Details, And Objectives
Introduction:
Recently, a flurry of Initial Public Offerings (IPOs) has hit the Indian stock markets and has kept investors busy. A few of them, including IdeaForge Technology and Cyient DLM, got subscribed by over 50 times, attracting heavy bidding from investors owing to their strong growth potential.
A Kolkata-based jewellery retail company – Senco Gold – is also slated to launch its IPO on 4 June 2023 worth Rs. 405 crores. Continue reading to know about the offer in detail and evaluate whether it warrants your subscription.
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About Senco Gold –
Incorporated in 1994, Senco Gold Limited is a Kolkata-based jewellery retailer operating pan-India under “Senco Gold & Diamonds”. The company specialises in gold and diamond jewellery, with its catalogue containing over 1,20,000 gold jewellery designs and over 69,000 diamond jewellery designs.
The company’s products are sold through multiple channels, including offline retail outlets and online stores. As of 31 March 2023, Senco Gold had 136 showrooms, including 75 company-operated and 61 Franchise-based showrooms, in 96 cities across 13 Indian states.
Key Strengths –
The company's strengths are as follows:
- It has a legacy of over five decades. The brand “Senco Gold & Diamonds” has become a household name on the current date
- With a vast network of showrooms totalling around 408,882 square feet area, it is the largest organised jewellery retailer in Eastern India
- It operates with an asset-light franchise model. Additionally, it has a strong base of company-operated showrooms
- It caters to the requirements of a diverse target group. Its Everlite Collection features lightweight jewellery for youths. The Aham Collection is designed specifically for male customers. Premium and designer jewellery is sold in the Vivaha collection
- It has well-established established systems and procedures to mitigate risks and boost efficiencies
Weaknesses –
The company’s weaknesses or risks include:
- There is significant competition in the Indian jewellery market. The risk of losing customers always looms
- It needs substantial working capital to operate. The inability to get adequate funding at the right time may hamper the business
- The ability to retain skilled Karigars and designers plays a crucial role. Attrition may lead to a loss of customers
- The business is highly subjected to volatility in the prices of gold, diamond, and silver. Unfavourable market conditions can impact the revenues
- Adherence to government regulations and acquiring certificates for jewellery may increase the operating costs
Financial Snapshot Of Senco Gold –
Senco Gold Ltd.’s net worth shot up by almost 1.5 times from Rs. 603 crores at the end of FY 2021 to Rs. 946 crores at the end of FY 2023. However, the company's total borrowings have also increased to Rs. 1177 crores from Rs. 532 crores in the same period.
For the financial year ending March 2023, the company’s revenue from operations stood at Rs. 4077 crores with a net profit of Rs. 158 crores.
Below is the table depicting the financials of the company as per the Draft Red Herring Prospectus (DRHP) filed with the market regulator:
|
Particulars |
As of and For FY Ending March 31 | ||
| 2023 | 2022 | 2021 | |
| Share Capital | 56 | 53 | 53 |
| Net Worth | 946 | 726 | 603 |
| Total Borrowings | 1177 | 863 | 532 |
| Revenue From Operations | 4077 | 3535 | 2660 |
| EBITDA Adjusted | 348 | 290 | 190 |
| Profit After Tax | 158 | 129 | 60 |
| Earnings Per Share (Diluted) | 23 | 19 | 9 |
| Net asset value (In Rs/share) | 137 | 109 | 91 |
| Return on Equity (%) | 19 | 19 | 11 |
*Amount in Crore
Details of Senco Gold IPO –
| IPO Date | Jul 4, 2023 to Jul 6, 2023 |
| Face Value | ₹10 per share |
| Price | ₹301 to ₹317 per share |
| Minimum Investment | ₹ 14,147 |
| Lot Size | 47 Shares |
| Total Issue Size | ₹405.00 Cr |
| Fresh Issue | ₹270.00 Cr |
| Offer for Sale | ₹135.00 Cr |
| Issue Type | Book Built Issue IPO |
| Listing At | BSE, NSE |
| Shareholding pre-issue | 6,91,45,806 |
| Reservation | |
| Qualified Institutional Buyers (QIBs) | 50% |
| Non-institutional Investors(NIIs) | 15% |
| Retail Investors | 35% |
What Should You Look At Before Buying?
Looking at the prevailing market scenario, it makes sense to grab every opportunity that comes your way. However, IPO investment must follow due diligence and research. In the last three years, Senco Gold’s revenue has grown considerably, making it a strong proposition for investment. With India being one of the largest consumers of gold in the world, it’s safe to assume that Senco Gold has a bright future.
However, you must also analyse the company’s weaknesses and global risk factors before making an investment decision. If you need to open a Demat account to invest in this upcoming IPO 2023, you can turn to Motilal Oswal.
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