Senco Gold, a leading jewellery player in eastern India, has successfully raised INR 121 crore in the anchor round ahead of its upcoming initial public offering (IPO). The company, known for its extensive retail network of 136 showrooms and specialization in gold and diamond sales, has received positive ratings from analysts. The IPO comprises a combination of fresh issue and offer for sale (OFS) segments, with the funds raised intended for working capital and general corporate purposes.
Senco Gold's IPO opened for subscription on Tuesday and will be available for public bidding until July 6. Prior to the IPO, the company secured investments from renowned investors, including Nippon MF, White Oak, Jupiter Asset Management, Bandhan MF, and 3P India Equity Fund, among others.
With shares offered in the price range of INR 301-317, investors can bid a minimum of 47 shares in one lot. Analysts have advised subscribing to the IPO based on the company's robust financials and reasonable valuations. Senco Gold is available at a price-to-earnings (P/E) ratio of 15.5x its FY23 earnings, which is lower than industry peers' valuations, according to Geojit Financial Services.
Senco Gold operates an extensive retail network of 136 showrooms, with a presence in 13 states/UTs across 96 cities. The company's product range includes gold, diamond, silver, platinum, precious and semi-precious stone jewellery, as well as other metal-based ornaments. Over the past three years, Senco Gold has exhibited a compounded annual growth rate (CAGR) of 19% in its topline and 20% in its bottomline.
Geojit expects Senco Gold to benefit from its strong brand reputation, five-decade legacy, company-operated showrooms, and established asset-light franchise model. However, Reliance Securities points out that the company's higher concentration in the Eastern region poses challenges, although market growth presents expansion opportunities.
The IPO comprises a fresh issue of INR 270 crore and an OFS segment totaling up to INR 135 crore. The net proceeds from the fresh issue will primarily be allocated to fund working capital requirements, with the remaining portion designated for general corporate purposes. The QIB portion has a 50% reservation, the NII category has a 15% reservation, and the retail portion has a 35% reservation.
IIFL Securities, Ambit, and SBI Capital Markets are the book running lead managers for the IPO, while KFin Technologies serves as the registrar.
(Note: The opinions and recommendations provided by experts are their own and do not represent the views of The Trend Chronicle.)
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