IPO listed on 26 Dec'23
Motisons Jewellers Ltd
Minimum Investment
₹ 13,750 / 250 shares
Grey market premium
₹ 120 (218% premium)
Issue price
₹ 55
Listing price
₹ 104
Listing gains
49 (89%)
Listing on
Dec 26, 2023
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- Despite the impressive growth in the firm's revenue and net earnings, it is crucial to observe additional financial indicators such as huge working capital requirements, underutilised capacities, high inventory levels and significant borrowings.
- From a valuation standpoint too, the IPO appears to be fully priced at a PE multiple of 25x, based on the projected earnings for the fiscal year 2024. The grey market premium (GMP) for the issue, however, suggests a strong listing. Therefore, investors seeking listing gains, may consider subscribing to this issue.
- However, investors who are interested in long-term capital appreciation should review the company's performance over the coming two quarters before making any investment commitments.
About the company
Founded in
16 Oct'97
Managing director
Sanjay Chhabra
- Motisons Jewellers Ltd (MJL) specializes in retailing a diverse range of jewellery, including gold, diamond, kundan, along with other types such as pearl, silver, platinum, precious and semi-precious stones, and various other metals. Additionally, their product line extends to gold and silver coins, utensils, and different artifacts.
- MJL operates under the ‘Motisons’ brand with four showrooms strategically positioned throughout Jaipur, Rajasthan. In addition to sourcing finished jewellery from various external suppliers, the firm employs expert artisans on a contractual basis and runs its own production facilities in Jaipur, dedicated to creating diamond and gemstone-studded jewellery. Moreover, it partners with a wide network of artisans for outsourcing the crafting of ornaments.
STRENGTHS
- Impressive track record: MJL has shown impressive growth with a Compound Annual Growth Rate (CAGR) of 31% in revenue, 26% in EBITDA, and a significant 51% in net profit over FY21-23.
- Robust Returns: In FY23, the Return on Equity was at 17.56%, while the Return on Capital Employed was at 30.04%.
- Margin Enhancement: The net profit margin has been on an upward trajectory, rising from 4.54% in FY21 to 4.69% in FY22, and then to 6.06% in FY23, further increasing to 6.32% by June 2023.
RISK FACTORS
- Geographic Concentration: MJL’s four showrooms are located exclusively in Jaipur, Rajasthan. Any negative events in this region could harm the company's business prospects, financial health, and operational results.
- Underutilized Manufacturing Capacity: The firm does not fully utilize its manufacturing facilities since it buys jewellery from third parties and has several job-work contracts with independent artisans. As of FY23, one manufacturing unit was operating at 0% efficiency, while another was at 6.25%. This underutilization could negatively affect the firm's future financial stability.
- IPO Funds for Loan Repayment: The proceeds from the IPO are planned to be used to repay bank loans with an 8.58% interest rate, which is lower than the 11.60% interest rate on loans from company promoters and related parties.
- High Working Capital Demands: MJL requires substantial working capital, 53.15% of which was financed through loans as of June 30, 2023. Inability to secure sufficient loans on favourable terms could materially harm its business, financial health, and operational outcomes.
- Excessive Inventory Levels: MJL’s inventory is 381.31% and 87.47% of its revenue, with inventory turnover days being 417 and 364 for the period ending June 30, 2023, and FY23, respectively. High levels of inventory and slow turnover could hinder the firm’s ability to adapt quickly to market changes and consumer demands, potentially affecting operations negatively.
- Risks of Unsecured Loans: The firm has taken unsecured loans totalling Rs 112.25 crore as of June 30, 2023, from various sources including Promoters and Group Companies. These loans are repayable on demand and could be called in at any time. If forced to repay, the firm might struggle to find alternative financing, negatively affecting its business and financial situation.
Issue details
Issue type
Mainstream
Issue size
₹ 151.09 crore
Fresh Issue
₹ 151.09 crore
OFS
₹ -
Price range
₹ 52 - 55
Lot size
250 shares
Issue Objective
Net proceeds of the issue (fresh issue) will be utilised towards:
- Repayment of borrowings availed by the firm from scheduled commercial banks;
- Funding its working capital requirements; and
- General corporate purposes
Dates
Bidding open
18 Dec'23
Bidding close
20 Dec'23
Allotment date
21 Dec'23
Refund date
22 Dec'23
Listing
26 Dec'23
IPO Reservations
Qualified institutional buyers
<50%
Non-institutional investors
>15%
Retail individual investors
>35%
Read the Offer Document
© 2025 by Liquide Solutions Private Limited, SEBI Registered Research Analyst (Registration number - INH000009816)
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