Vaibhav Jewellers makes a dull start, lists at par with IPO price of Rs 215

Vaibhav Jewellers is the sixth company to be listing in the new timeline of T+3.

Vaibhav Jewellers made a lacklustre debut on the bourses on October 3, listing at par with its issue price of Rs 215. The stock listed at Rs 215 on both the NSE and the BSE.

This listing was in line with analysts' expectations of a muted debut, as its public offer got a muted response from investors despite its resilient financial performance.

The initial public offering issue was subscribed 2.25 times, with the quota reserved for high-networth individuals being subscribed 5.18 times.

The response from qualified institutional buyers and retail investors was largely muted, as the portions reserved for them were subscribed just 1.06 times and 1.66 times.

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The jewellery retailer’s revenue has grown consistently, along with a robust increase in bottomline. Its net profit surged at a compound annual growth rate (CAGR) of 85.81 percent from FY21 to FY23, reaching Rs 71.6 crore. Revenue also rose at an average growth rate of 18.92 percent to Rs 2,027.34 crore during the same period.

"The Andhra Pradesh-based company also boasts of a 23 percent return on its equity in FY23 which is attractive compared to its already listed peers," said Dhruv Mudaraddi, research analyst at StoxBox.

This hyperlocal jewellery retail chain has a presence in the micro markets of Andhra Pradesh and Telangana, operating 13 showrooms. Its plans include opening eight more stores to tap into tier-2 and 3 markets, which is a promising strategy given that rural markets accounted for 50-52 percent of the total jewellery market in FY23, Mudaraddi added.

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