Shanti Gold International files IPO papers to raise funds for facility expansion, working capital

Shanti Gold International IPO

Gold jewellery maker Shanti Gold International has filed preliminary papers with SEBI to raise funds via initial public offering (IPO) for facility expansion, and working capital requirements.

The IPO comprises of entirely fresh issue of 1.8 crore equity shares with no offer-for-sale component, as per the draft red herring prospectus filed on January 13.

Founded in 2003, the Mumbai-based company claimed to be one of the leading manufacturers of 22kt CZ casting gold jewellery, in terms of installed production capacity. It competes with listed entities like Utssav CZ Gold, RBZ Jewellers, and Sky Gold.

Shanti Gold International intends to spend Rs 45.8 crore out of IPO proceeds for setting up the proposed Jaipur facility. "The Jaipur facility will have an installed production capacity of 1,200 kgs, which will augment our currently existing installed production capacity to a total of 3,900 kgs, from 2,700 kgs currently," the company said in its DRHP.

On an overall basis, plain gold jewellery accounts for 85 percent of its total bridal jewellery. The new product line at the Jaipur facility will cater to the demand for plain gold jewellery, it said.

Further, the company will utilise Rs 190 crore for working capital requirements, Rs 20 crore for repaying debt, and the remainder funds for general corporate purposes.

On the financial front, Shanti Gold International has recorded net profit at Rs 26.9 crore for the year ended March 2024, up 35.6 percent compared to the previous fiscal. Revenue from operations during the fiscal 2024 increased by 4.7 percent to Rs 711.4 crore year-on-year. For the first half of current financial year, the profit stood at Rs 18.3 crore on revenue of Rs 505.9 crore.

Choice Capital Advisors is appointed as the book running lead manager to the issue.