PN Gadgil Jewellers IPO opens with strong GMP. Should you bid?

The initial public offer (IPO) of PN Gadgil Jewellers opened for subscription on Tuesday and will be available for investors to bid till September 12. The IPO includes a fresh issue of up to 1.7 crore shares and an offer for sale (OFS) of up to 52 lakh shares by Binod Kumar Agarwal.

The funds raised through the IPO are proposed to be utilised for the funding of expenditure towards setting of 12 new stores in Maharashtra, repayment of debt, and other general corporate purposes.

PN Gadgil Jewellers IPO price band

The company has fixed a price band of Rs 456-480 for the public offer, where investors can bid for 31 shares in one lot.

PN Gadgil Jewellers GMP

The current GMP of PN Gadgil Jewellers is Rs 230 in the unlisted market, indicating a premium of 48% to the issue price.

PN Gadgil Jewellers IPO review

Analysts advised the investors to subscribe to the IPO as the company enjoys popularity as a household brand in fashion jewellery among customers.

"On valuation, based on FY24 earnings, the issue looks fully priced in offer at the upper price band. Considering its IPO objectives with planning the expansion of its footprint in Maharashtra and outside adds rationale for long term investors. Hence recommend investors to subscribe for health listing gain as well as long term," said Prashanth Tapse of Mehta Equities.

Other details

PN Gadgil Jewellers is the second largest among the prominent organised jewellery players in Maharashtra in terms of the number of stores as on January 2024.

The company is also the fastest-growing jewellery brand amongst the key organised jewellery players in India, based on the revenue growth between FY21 and FY23.

PN Gadgil achieved an EBITDA growth of 56.5% between FY21 and FY23 as well as the highest revenue per square feet in FY23, which was the highest among the key organised jewellery players in India.

The company expanded to 33 stores, which includes 32 stores across 18 cities in Maharashtra and Goa and one store in the US with an aggregate retail area of approximately 95,885 sq ft, as of December 2023.

Additionally, Gadgil has also launched their mobile application "PNG Jewellers" in March 2022, which allows them to keep customers updated on new designs and collections and familiarise them with the product portfolio.

In FY23, the company's revenue from operations jumped 76% year-on-year to Rs 4,507 crore and the profit after tax increased 35% to Rs 94 crore. For the year ended March 2024, revenue from operations stood at Rs 6110 crore and PAT came in at Rs 154 crore.

Motilal Oswal Investment Advisors, Nuvama Wealth Management (formerly Edelweiss Securities) and BOB Capital Markets are the book running lead managers to the issue.