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PN Gadgil Jewellers, a well-known jewellery manufacturer based in Maharashtra, has launched its initial public offering (IPO) on the Dalal Street. With an estimated value of Rs 1,100 crore, the IPO has attracted significant investor interest. As of the end of the first day of bidding, the IPO had garnered bids for 3.39 crore shares, translating to an overall subscription of 2.0 times the equity on offer. This positive response highlights the investor confidence in the company's growth potential.
The IPO saw strong participation across various investor categories. While the portions reserved for qualified institutional buyers (QIBs) and non-institutional investors (NIIs) saw subscriptions of 1 per cent and 3.3 times, respectively, the quota meant for retail investors attracted bids of 2.6 times the equity reserves. This indicates a strong belief in the company's ability to deliver value to retail investors.
Renowned market expert Anil Singhvi has recommended subscribing to the PN Gadgil Jewellers IPO, emphasizing the potential for “good listing gain and for the long term.” He has highlighted the company's positive aspects, including its strong promoter background, established presence in Maharashtra, and impressive financial track record. Singhvi acknowledges that the company's heavy focus on Maharashtra and its requirement for substantial capital for expansion present potential challenges. However, he believes the overall fundamentals justify the investment.
Brokerage firm SBI Securities echoes this sentiment by assigning a 'subscribe' rating to the IPO, recommending it for “long-term investment horizon.” SBI Securities analysts value the IPO at a price-to-earnings multiple of 42.2 times the FY24 numbers at the upper end of the price band. The brokerage cites the company's status as one of the fastest-growing organized jewellers in Maharashtra and its strong brand legacy as key factors supporting their recommendation. They highlight the company's impressive revenue, EBITDA, and PAT growth rates between FY22-FY24, further emphasizing its robust financial performance.
PN Gadgil Jewellers plans to utilize the proceeds from the IPO to repay existing debt, thereby reducing its finance cost by approximately Rs 31 crore. Additionally, the company aims to invest Rs 393 crore to open 12 new stores in FY25 and FY26, strategically expanding its footprint in the market. This expansion strategy is supported by the positive growth trend in the jewellery market, which the company is well-positioned to capitalize on. The company's ability to leverage its brand recognition and strong financial performance to navigate the competitive jewellery market will be a key factor in its future success.