IPO listed on 14 Jul'23
Senco Gold Ltd
Minimum Investment
₹ 14,899 / 47 shares
Grey market premium
₹ 122 (38% premium)
Issue price
₹ 317
Listing price
₹ 431
Listing gains
114 (36%)
Listing on
July 14, 2023
Subscribe for listing gains
- Despite the impressive growth in the firm's revenue and net earnings, it is crucial to observe additional financial indicators such as escalating debt, huge working capital requirements, negative operational cash flow, and a downward trend in return ratios
- From a valuation standpoint, the IPO appears to be reasonably priced at a PE multiple of 15.5x, which is lower than the industry average. Additionally, the grey market premium (GMP) for the issue, often used as a gauge for investor sentiment, indicates a premium 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
22 Aug'94
Managing director
Suvankar Sen
- Largest organized jewellery retailer in the eastern region of India in terms of the number of stores
- Specializes in the sale of gold and diamond jewellery, as well as jewellery crafted from silver, platinum, precious and semi-precious stones, and other metals; Also offers costume jewellery, gold and silver coins, and silver utensils
STRENGTHS
- Impressive track record: Senco has achieved a remarkable growth rate with a CAGR of 24% in revenue, 34% in EBITDA, and 61% in PAT during FY21-23
- Strong branch network: As of 31 March 2023, Senco operates 136 showrooms across 96 cities and towns in 13 Indian states, spanning 409,882 square feet
RISK FACTORS
- Escalating debt: The company's debt has been consistently increasing, as evidenced by the debt-to-equity ratios of 0.89 in FY21, 1.19 in FY22, and 1.25 in FY23
- Deteriorating return ratios: The Return on Equity has seen a dip from 19.43% (FY22) to 18.96% (FY23), alongside a drop in Return on Capital Employed from 15.58% (FY22) to 14.22% (FY23)
- Negative cash flows: The company has reported negative cash flow from operations in two out of the past three fiscal years, which raises concerns. Furthermore, its working capital needs appear to be significantly higher compared to its peers
- Potential impact of gold price fluctuations: A significant increase/ fall in the prices of gold or a negative outlook on future gold prices could adversely affect the company's sales volumes in the short term
Issue details
Issue type
Mainstream
Issue size
₹ 405 crore
Fresh Issue
₹ 270 crore
OFS
₹ 135 crore
Price range
₹ 301 - 317
Lot size
47 shares
Issue Objective
Net proceeds of the issue (fresh issue) will be utilised towards:
- Funding working capital requirements of the company, and
- General corporate purposes
Dates
Bidding open
4 Jul'23
Bidding close
6 Jul'23
Allotment date
11 Jul'23
Refund date
12 Jul'23
Listing
14 Jul'23
IPO Reservations
Qualified institutional buyers
<50%
Non-institutional investors
>15%
Retail individual investors
>35%
Read the Offer Document
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