Shringar House of Mangalsutra IPO subscribed 8x on Day 2: Should you apply?

Shringar House of Mangalsutra IPO

The initial public offering of Shringar House of Mangalsutra continued to see strong investor interest on its second day of public bidding on September 11 (Thursday). The Rs 400.95-crore issue was subscribed more than eight times its offer size on Day 2.

The IPO received bids for more than 14 crore shares, as against the offer size of 1.70 crore shares, according to data on NSE. Employees have subscribed their reserved portion nearly 24 times. Retail investors and Non Institutional Investors (NII) booked the portions kept for them 10 times and 15 times respectively. Qualified Institutional Buyers (QIB) have subscribed 86 percent of their reserved portion so far.

Shringar House of Mangalsutra IPO GMP:

Ahead of listing, the unlisted shares of the company were trading with a grey market premium (GMP) of 18 percent over the IPO price at Rs 195 apiece, according to data on Investorgain and IPO Watch.

Key things to know about Shringar House of Mangalsutra IPO:

Shringar House of Mangalsutra, which makes and designs mangalsutras for several top jewellery brands, launched its IPO to raise around Rs 401 crore through an entirely fresh issue of 2.43 crore equity shares at a price band of Rs 155-165 per share.

Investors can bid for a minimum of 90 shares, requiring an investment of Rs 14,850 at the upper price band, and in multiples thereafter. The allotments will likely be finalized on September 15, and the shares are scheduled to debut on stock markets on September 17.

A day before the IPO opened for public bidding, Shringar House of Mangalsutra said that it has raised Rs 120.2 crore through its anchor book on September 9. Kotak Mahindra Life Insurance Company was the largest investor in the anchor book, acquiring 12.12 lakh shares worth Rs 20 crore, followed by Maybank Securities (Rs 15 crore worth shares). Further, Plutus Investment Trust, Founders Collective Fund, North Star Opportunities Fund, and Societe Generale bought shares worth Rs 10 crore each.

The Mumbai-based Shringar House of Mangalsutra intends to utilise Rs 280 crore of the net IPO proceeds for its working capital requirements, and the remainder funds for general corporate purposes.

The company sells its products to marquee clients across India and internationally including Malabar Gold, Titan Company, Reliance Retail, Novel Jewels (Aditya Birla Group), Joyalukkas India, P N Gadgil Jewellers, Kalamandir Jewellers, Waman Hari Pethe Jewellers, Goldbox Enterprises (UK), Sona Sansaar (New Zealand), Damas Jewellery (UAE), Vaibhav Jewellers, and D P Abhushan.

Should you apply for Shringar House of Mangalsutra IPO?

Master Capital Services in its IPO noted advised investors to subscribe to the issue for the long term. "The Indian Mangalsutra market reached Rs. 178 billion, showing a y-o-y growth of 16%. By CY32, the Indian Mangalsutra market is expected to grow at 5.8% y-o-y to Rs. 303 billion. Mangalsutra is a vital part of Indian weddings. Its ritualistic value makes it an essential item for weddings, thereby maintaining a steady market demand… In the long term the market for Mangalsutra is expected to remain healthy. Shrinagar House of Mangalsutra Limited is well-positioned to capture this expected growth by establishing a supply chain network to reach untapped geographical regions. The company is strengthening its relationships with existing clients, participating in their future expansions, and continuing to invest in marketing and brand-building initiatives," it said.

Siddharth Maurya, Founder & Managing Director of Vibhavangal Anukulakara, noted that jewellery, like real estate is viewed as a timeless asset. "Apart from its monetary worth, it has tradition, safety, and emotional immutability," he said.

"The strong investor demand and premium in the grey market reiterate the market's thirst for sectors that balance tradition with growth. To us in real estate, this is a familiar script—culturally rooted sectors are being perceived as secure, long-term generators of wealth," he added.

Explaining the technical side of the IPO, Shravan Shetty, Managing Director at Primus Partners, said that the company was fairly priced at 19 times, as the upper band level also secured almost 120 crores from anchor investors, indicating value in the underlying business and growth potential. "Given the excellent growth seen over the years and with marquee players working with it, the valuations are expected to increase further. This has led to brokerages giving a favourable view towards the IPO," he added.

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