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The initial public offering (IPO) of PN Gadgil Jewellers Ltd, a prominent name in the Indian jewelry sector, has garnered significant investor interest. Opening on Tuesday, the IPO has already achieved nearly seven times subscription by the second day of bidding. This robust response reflects the market's confidence in the company's future prospects and its well-established brand recognition.
The IPO, which has a price band set between Rs 456 to Rs 480 per share, has seen strong demand across investor categories. Non-institutional investors have subscribed 16.01 times, while Retail Individual Investors (RIIs) have shown their enthusiasm with a 7.05 times subscription. Qualified Institutional Buyers (QIBs), however, have shown a more cautious approach, subscribing 10 per cent of their allotted quota. The IPO will be concluding on Thursday, September 12, with allotment scheduled for September 13 and listing expected on September 17.
The grey market premium (GMP), a metric reflecting investor sentiment and expectations for listing gains, has reached Rs 258 for PN Gadgil Jewellers. This translates to a potential listing gain of 53.75 per cent, indicating a strong appetite for the company's shares. However, it's crucial to remember that GMP is a speculative indicator and actual listing performance may differ.
Analysts have largely expressed positive sentiments towards the PN Gadgil Jewellers IPO. Canara Securities, Granting a 'Subscribe' rating, highlighted the company's strong presence in Maharashtra, extensive inventory, and its position as the fastest-growing jewelry brand in India. The company's impressive EBITDA growth, nearly doubling from Rs 141.98 crore in FY22 to Rs 277.42 crore in FY24, further supports this optimistic outlook.
Other brokerage firms like Anand Rathi and Nirmal Bang have also given 'Subscribe' ratings, citing the company's stable and growing profits, efficient operations, and attractive valuation. Despite lower operating margins compared to the industry, PN Gadgil Jewellers has demonstrated robust return ratios, fueled by its cost-efficient operations. These factors, combined with the company's strategic growth plans, including expanding its retail network and boosting its revenue share of studded jewellery sales, have contributed to the favorable analyst sentiment.
The company has already secured Rs 330 crore from anchor investors, a testament to the strong investor confidence in PN Gadgil Jewellers. The IPO proceeds will be utilized for strategic initiatives such as setting up new stores, debt repayment, and general corporate purposes. With its strong brand recognition, growing market presence, and positive analyst recommendations, PN Gadgil Jewellers IPO is poised to attract significant investor interest.
The IPO offers investors an opportunity to participate in the growth story of a well-established jewelry player. However, potential investors are advised to carefully assess their investment goals, risk tolerance, and understand the inherent risks associated with IPO investments before making any investment decisions.
Source: PN Gadgil Jewellers IPO Receives Nearly 7x Subscription on Day 2, Check GMP Today