Manoj Vaibhav Gems N Jewellers, which is known through its brand identity of Vaibhav Jewellers in South India, is expected to see a tepid debut on the bourses on October 3 despite better financial performance, may be due to lower-than-expected IPO subscription numbers. The final issue price has been fixed at Rs 215 per share.
The public issue had seen a 2.25 times subscription during September 22-26. High networth individuals led the support to the offer, subscribing for 5.18 times the alloted quota, while qualified institutional buyers, and retail investors have bought 1.06 times and 1.66 times the reserved portion respectively.
This will be the sixth company after Ratnaveer Precision Engineering, Zaggle Prepaid Ocean Services, Samhi Hotels, Sai Silks Kalamandir, and Signature Global, listing in the new timeline of T+3 (issue closing date + three working days).
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The market regulator Sebi has asked companies launching IPOs with effect from September 1 to go voluntarily for listing in the T+3 timeline instead of old timeline of T+6, but made it mandatory for IPOs opening with effect from December 1.
The stock is valued at 11.7x of its FY23 earnings. It was available at a 3-5 percent premium over the issue price in the grey market, an unofficial platform for trading in IPO shares till the listing, analysts on anonymity said.
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"With the Manoj Vaibhav Gems N Jewellers IPO receiving a tepid subscription of about 2.25x overall, we expect a flattish opening for the issue on Tuesday," Dhruv Mudaraddi, research analyst at StoxBox, said.
Astha Jain, senior research analyst at Hem Securities, too, is expecting a status quo listing for Vaibhav Jewellers.
However, the company has displayed steady growth in revenue and even more robust bottomline growth with profit recording a CAGR of 85.81 percent during FY21-FY23 to Rs 71.6 crore, and the revenue averaging a growth rate of 18.92 percent to Rs 2,027.34 crore during the same period.
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The Andhra Pradesh-based jewellery retailer also boasts of a 23 percent return on its equity in FY23 which is attractive compared to its already listed peers, Dhruv said.
The hyperlocal jewellery retail chain has presence in the micro markets of Andhra Pradesh and Telangana with 13 showrooms. It plans to open eight stores to target more Tier-2 and Tier-3 markets which augurs well as rural markets contributed 50-52 percent of the total jewellery market in FY23, Dhruv said.
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Vaibhav Jewellers, which enjoys an early mover advantage in Andhra Pradesh, raised Rs 270.20 crore through its initial public offering that had comprised of a fresh issue of Rs 210 crore of shares by the company, and an offer-for-sale (OFS) of Rs 60.20 crore of shares by promoter Grandhi Bharata Mallika Ratna Kumari (HUF).
The regional jewellery brand led by first-generation woman entrepreneur Bharata Mallika Ratna Kumari Grandhi, along with her daughter Grandhi Sai Keerthana, will spend net fresh issue proceeds for setting up eight showrooms and the remaining funds for general corporate purposes.
The price band for the offer is set at Rs 204-215 per share.
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