The issue has attracted bids for 1,11,32,702 shares or 1.18 times so far on Day 2 as against the issue size of 94,18,603 shares. Both retail and NII portions are oversubscribed.
The retail portion of the issue was subscribed at 1.87 times, and the non-institutional category’s subscription rate stood at 1.16 times. There were no bids from qualified institutional buyers so far.
According to market analysts, the company’s shares are trading at a premium of Rs 120 in the unlisted market.
The company is offering its shares in the price range of Rs 301-317, and investors can bid a minimum of 47 shares in one lot.
Ahead of the IPO, the company raised Rs 121 crore in the anchor round, which saw the participation of marquee investors, including Nippon MF, White Oak, Jupiter asset management, Bandhan MF, and 3P India Equity Fund, among others. 3P India Equity Fund is owned by Prashant Jain.
Most analysts advised investors to subscribe to the issue of robust financials and reasonable valuations.”At the upper price band company is valuing at a P/E of 16x with a market cap of Rs 24,605 million post issue of equity shares and return on net worth of 18.9%. We believe that issue is fairly priced and recommend ‘Subscribe – Long Term’ rating to the IPO,” brokerage firm Anand Rathi said.
Senco Gold boasts an extensive retail network of 136 showrooms (75 company-owned and 61 franchised), with store networks in 13 states/UTs across 96 cities. However, around 63% of the company’s showrooms are located in West Bengal.
Specialising in the sale of gold and diamonds, the company also offers an extensive selection of jewellery crafted from silver, platinum, precious and semi-precious stones, and various other metals. The company’s topline and bottom line grew at a three-year CAGR of 19% and 20%, respectively.
At the upper price band of Rs 317, Senco Gold is available at a P/E of 15.5x its FY23 earnings, which is lower than industry peers’ valuations, Geojit Financial Services said while assigning a “subscribe” rating to the offer.
“A strong brand name and a legacy of over five decades, strong company-operated showrooms, and an established asset-light ‘franchise’ model are expected to benefit the company,” Geojit said.
While the company’s financials have improved over the last 2 years, its higher concentration in the Eastern region poses challenges, according to Reliance Securities.
The brokerage went on to say that the market growth provides an opportunity for the company to expand going ahead. “Current valuation leaves limited upside. We believe it is more or less fairly valued.”
The IPO is a combination of fresh issues and the OFS portion. The fresh equity issue is Rs 270 crore, and the OFS segment aggregates up to Rs 135 crore.
Of the fresh issue net proceeds, Rs 196 crore will be utilised for funding working capital and residual for other general corporate purposes. About 50% of the net offer is reserved for the QIB portion, 15% for the NII category, and 35% for the retail portion.
The net proceeds from the issue will be used for funding the company’s working capital requirements and other general corporate purposes.
IIFL Securities, Ambit, and SBI Capital Markets are book-running lead managers to the issue, while KFin Technologies is the registrar.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)
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