PN Gadgil Jewellers sets price band of Rs 456-480 a share for its IPO

The issue size will comprise a fresh issue of Rs 850 crore and an offer for sale of upto Rs 250 crore by SVG Business Trust.

PN Gadgil Jewellers Ltd has set a price band of Rs 456-480 a share for its Rs 1,100-crore initial public offering that will open for subscription on September 10.

The anchor bidding will start on September 9 and the issue will close on September 12. Allotment will be on September 13, refunds will be on September 17 and the stock will list on exchanges on September 18.

The issue size will comprise a fresh issue of Rs 850 crore and an offer for sale of up to Rs 250 crore by SVG Business Trust.

The jewellery company intends to spend Rs 387 crore of the fresh issue proceeds to set up 12 stores in Maharashtra by FY26 and will use Rs 300 crore to repay debt. The remaining funds will be utilised for general corporate purposes. The company had a debt of Rs 377.45 crore as of February 29.

PN Gadgil claims to be the second largest organised jewellery player in Maharashtra in terms of number of stores. It had 33 stores as of December —32 in Maharashtra and Goa. It has one store in the US.

While 23 stores are operated and managed by the company, 10 are franchisee stores (franchisee owned and operated by the firm).

PN Gadgil Jewellers, which competes with Kalyan Jewellers India, Senco Gold, and Thangamayil Jewellery, recorded a 34.8 percent on-year growth in net profit at Rs 93.7 crore for FY23, driven by healthy topline but the operating margin was under pressure due to elevated input cost.

For FY23, revenue was at Rs 4,507.5 crore, growing 76.4 percent over the previous year, while EBITDA (earnings before interest, tax, depreciation and amortisation) increased 10.3 percent to Rs 122.7 crore but margin dropped 163 bps to 2.72 percent during the same period.

For the six months period ended September FY24, net profit stood at Rs 43.75 crore on revenue of Rs 2,627.8 crore.

Motilal Oswal Investment Advisors, Nuvama Wealth Management and BOB Capital Markets are the merchant bankers to the issue.