Of the total, Senco Gold IPO will include a new issue worth 325 crore, and an offer to sell (OFS) up to 200 crores. The selling shareholder will be SAIF Partners India IV.

The equity shares offered in the IPO will have a par value of 10 each. However, details of price ranges, number of shares, lot size, and IPO period, among others, will be revealed in due course.

50% of the IPO size will be reserved for Qualified Institutional Buyers (QIBs), while 35% of the share will be reserved for Retail Individual Investors (RIIs) and the remaining 15% will be reserved for non-institutional investors ( NII).

Companies such as IIFL Securities, Ambit and SBI Capital Markets will act as lead managers (BLRM) for the IPO.

The net proceeds from the new issue will be used to fund working capital and general corporate purposes. While the proceeds of the sale offer will be used by the selling shareholders.

In addition, the Company may consider a private placement of Equity Shares for a cash consideration of 65 crores. If the pre-IPO placement is undertaken, the amount raised will be deducted from the new issue.

Senco Gold has a history of over five decades and has a fourth generation entrepreneur in the jewelry industry. The company was incorporated in August 1994. Since then, the company has become the largest organized jewelry retailer in the eastern region of India based on number of stores and among jewelry retailers based in eastern India. That said, the company has the widest geographic footprint in non-Eastern states.

Senco Gold primarily sells gold and diamond jewelry as well as jewelry in silver, platinum, precious and semi-precious stones, and other metals. Other offerings include costume jewelry, gold and silver coins, and silver utensils. Products are sold under the trade name “Senco Gold & Diamonds” through multiple channels, including their 70 company-operated showrooms and 57 franchised showrooms. The company continues to expand its geographic presence and work towards an omnichannel network.

To date, the company has 127 showrooms, which have a total area of ​​approximately 393,342 square feet, in 89 cities and towns in 13 states across India. Some of the Company’s franchise showrooms are located in areas other than the Metros and Tier I, which gives us greater reach in Tier 2 and Tier 3 locations.

Earlier on April 7, the company entered into a share purchase agreement with Oman India Joint Investment Fund Trustee Company, the trustee of Oman India Joint Investment Fund II for the issue and subscription of 26,63,541 shares of participation for a total consideration of nearly 75 crore.

Among its business strategies going forward, the company plans to expand its presence through a strong and diverse distribution channel. In addition to its usual Senco Gold & Diamonds showroom format, the company intends to expand with the addition of next-generation and future-generation showroom formats, including showrooms D’Signia in areas with relatively higher affluence and Everlite showrooms in areas where the median age is relatively lower.

Senco Gold is also focused on increasing its overall operating margins by adapting an optimal product mix. The company plans to prioritize diamond jewelry because jewelry set with diamonds typically carries higher gross margins than gold jewelry according to the CRISIL report. During the financial years 2019, 2020, 2021 and during the eight months ended November 2021, the sale of diamonds and precious/semi-precious stones represented respectively 5.62%, 6.13%, 5.06% and 4.84% of the company’s operating revenue.

Additionally, the company will continue to invest in marketing and branding initiatives through a hyperlocal strategy. He believes that effective marketing is important for future revenue growth,

improve our brand visibility, build relationships with target customers and sell products competitively and profitably.

As of January 31, 2022, the company has implemented a loyalty program with more than 630,000 active customers.

In addition, to meet the changing needs of consumers, especially the younger generation, the company could consider exploring complementary products to jewelry in the luxury and lifestyle field, such as perfumes and bags.

Another strategy of the company is to grow its business through the digital platform and leverage our manufacturing capability to create a lean sales channel, providing a seamless mix of offline and online shopping choices. for the customers.

Senco Gold’s operating revenue increased at a CAGR of 9.92% from fiscal 2020 to fiscal 2021, while its profit for the year declined at a CAGR of 32.39% from fiscal year 2020 to fiscal year 2021.

Gold jewelry demand in terms of volume is expected to improve over the next five years.

In its project, Senco Gold pointed out that a weak basis, pent-up demand, an expected reduction in the price of gold and more marriages are likely to boost demand for jewelry in the short term. In the long term, improving economic growth (annual real GDP growth of 7-8% expected over the next five years), easing short-term disruptions caused by Covid-19, increasing urbanization and rising levels of disposable income should support growth. The formulation of a comprehensive gold policy, which was announced in the 2018-19 Union budget, and mandatory hallmarking should also be positive for the industry, especially the long-term organized players.

CRISIL Research expects consumer demand for gold to grow at a CAGR of 13-15% over the next five years. Inflation and geopolitical events are likely to impact demand.

Senco Gold will compete with major players such as Kalyan Jewelers India and Titan Company on the exchanges after the IPO. According to the project, Senco Gold has a diluted EPS of 9.25 per share in March 2021, while Kalyan Jewelers and Titan has a diluted EPS of (-0.07) and 10.96 respectively. Senco’s return on net worth (RoNW) is 10.65%, while Kalyan’s is -0.25% and Titan’s is 13.74%. The net asset value per share is 90.64 at Senco against Kalyan and Titan who have NAV at 11:44 p.m. and 84.45 per share.

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