PN Gadgil Jewellers IPO Debuts with 74% Premium, Analysts Bullish on Long-Term Prospects
Pune-based jewellery retailer PN Gadgil Jewellers made a stellar debut on the stock exchanges today, listing at a premium of nearly 74% over its issue price. The company’s shares were listed at ₹830 on the NSE and ₹834 on the BSE, compared to the IPO price of ₹480 per share.
The strong listing gains come on the back of an overwhelming response to the IPO, which was subscribed 59.41 times at close. The Qualified Institutional Buyers (QIB) portion was oversubscribed by 137 times, while the Non-Institutional Investors (NII) and Retail Individual Investors (RII) portions were subscribed 56.09 times and 16.58 times, respectively.
Main Points
Analysts Bullish on PN Gadgil’s Long-Term Prospects
Analysts remain bullish on PN Gadgil’s long-term prospects, citing the company’s strong brand loyalty, strategic expansion plans, and diverse product portfolio. Prashanth Tapse of Mehta Equities recommended long-term investors to ‘Hold’ the stock, stating that the company is well-positioned to capitalize on the growing demand for gold and jewelry.
“PN Gadgil’s listing is matching the time when gold is also shining almost near all-time high, we believe the shine can be seen on listing day. We think a strong brand legacy and a diverse portfolio in gold, silver, platinum and in diamond jewellery, PNG is catering to a wide range of customer preferences and price points, from traditional wedding jewellery to modern everyday wear,” Tapse said.
Funds to be Utilized for Expansion and Debt Repayment
The company plans to utilize the funds raised through the IPO for setting up 12 new stores in Maharashtra, repaying debt worth ₹300 crore, and for general corporate purposes. As of March 2024, PN Gadgil’s borrowings stood at ₹397 crore.
Diverse Product Portfolio and Strong Brand Presence
PN Gadgil Jewellers offers a wide range of precious metal/jewelry products including gold, silver, platinum, and diamond jewelry under its brand name ‘PNG’ in various price ranges and designs. The company operates 39 retail outlets, primarily in Maharashtra and Goa, and has a growing presence in the US market.
For the six months ended September 30, 2023, PN Gadgil posted a net profit of ₹43.75 crore on revenues of ₹2,631.15 crore. For the financial year ending March 31, 2023, the company’s net profit stood at ₹93.7 crore on revenues of ₹4,559.31 crore.
Grey Market Premium Indicates Strong Listing Gains
Ahead of the listing, PN Gadgil’s shares were trading at a premium of ₹300-305 in the grey market, suggesting a listing pop of about 63-65% for investors. The grey market is an unofficial ecosystem where shares start trading before the offer opens for subscription and continue to trade until the listing day.
Subscription Details and Anchor Investors
The ₹1,100 crore IPO comprised a fresh issue of equity shares worth ₹850 crore and an Offer For Sale (OFS) of ₹250 crore by promoter SVG Business Trust. Ahead of the issue opening, the company had raised ₹330 crore from anchor investors, including HDFC MF, Tata MF, Edelweiss MF, LIC MF, Invesco India, and Citigroup
Disclaimer: The information given in this article is from investment experts and brokerage companies, they do not represent Local Haryana. Before taking any investment related decision, you must consult a certified expert.
