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18 August 2023

Senco Gold IPO: Shining Bright in the Jewellery Landscape

Introduction:

Incorporated in 1994, Senco Gold Limited is a prominent pan-India jewellery retailer renowned for its brand name "Senco Gold & Diamonds." The company specialises in offering an extensive range of jewellery, including gold, diamond, silver, platinum, precious and semi-precious stones, and other metals. Senco Gold also presents costume jewellery, gold and silver coins, and silver utensils, catering to a diverse clientele.

Wide Catalog and Design Expertise:

Senco Gold stands out with an impressive catalogue of over 108,000 gold jewellery designs and more than 46,000 diamond jewellery designs. Most of these designs are handcrafted and manufactured in-house, leveraging the skills of over 170 proficient local craftsmen based in Kolkata and across the nation. The company collaborates with a team of 20 designers, further enhancing its innovative product range.

Brand Diversity to Capture Market Segments: The company has strategically developed multiple jewellery brands to cater to different customer segments:

1. Everlite: Focusing on lightweight jewellery, this brand appeals to the younger generation and the upwardly mobile demographic with smaller average ticket sizes.
2. Gossip: Offering silver and fashion jewellery, Gossip resonates with those seeking trendy and stylish options.
3. Aham Collection: This collection specifically targets men, providing a variety of jewellery options for this segment.
4. D'Signia Showrooms: These premium showrooms offer a selection of heavier and designer jewellery, delivering a premium retail experience.
5. Vivaha Collection: Targeting customers looking for premium designer jewellery, this collection enhances the overall jewellery shopping experience.

Partnerships and Recognitions:

Drone Destination has forged key partnerships with notable entities, including IGRUA, IFFCO, IIT Patna, NSDC, Neo-Geo, and Matrix-Geo. These strategic collaborations have further bolstered the company's position in the industry. Notably, the company became the first Drone Training Partner of the National Skill Development Corporation (NSDC) in October 2022, solidifying its role as a pioneer in drone training.

Extensive Showroom Network:

Senco Gold operates through a network of over 136 showrooms, spanning approximately 409,882 sq. ft. These showrooms are spread across 99 cities and towns in 13 states across India. This expansive presence underscores the company's commitment to serving customers in various regions.

Senco Gold IPO Highlights:

The Senco Gold IPO is a Book Built Issue with a total issue size of ₹405.00 Crores. The price range for the IPO is ₹301 to ₹317 per share, and the listing will be on both BSE and NSE. The IPO subscription was open from July 4, 2023, to July 6, 2023, and the expected listing date is July 14, 2023.

Promoter Holding:

The company's promoters include Mr. Suvankar Sen, Jai Hanuman Shri Siddhivinayak Trust, and Om Gan Ganpataye Bajrangbali Trust. The pre-issue shareholding of the promoters stands at 76.92%, which is expected to reduce to 68.48% post the IPO.

Key Financials and Indicators

Financial Information (Restated Consolidated):

Total Assets	₹1,559.30 Crores to ₹2,905.32 Crores
Total Revenue	₹2,674.92 Crores to ₹4,108.54 Crores
Profit After Tax	₹61.48 Crores to ₹158.48 Crores
Net Worth	₹602.51 Crores to ₹944.97 Crores
Total Borrowing	₹532.44 Crores to ₹1,177.17 Crores

Key Performance Indicators

P/E (x)	15.53
Market Cap (₹ Crores)	₹2,462
ROE	18.9%
ROCE	14.2%
Debt/Equity	1.25
EPS (₹)	22.93
RoNW	18.96%

Use of Proceeds:

The net proceeds from the IPO will be used for funding working capital requirements and general corporate purposes.

Expert Review:

Despite operating in a competitive, fragmented, and regulated industry, Senco Gold's comprehensive product range and consistent financial performance position it favourably. The issue is reasonably priced, making it an appealing option for medium to long-term investors.

IPO Subscription Status:

The Senco Gold IPO garnered a remarkable subscription of 77.25 times as of July 6, 2023. The retail category was subscribed 16.28 times, the QIB category 190.56 times, and the NII category 68.44 times.

Conclusion:

Senco Gold's IPO showcases an opportunity for investors to be part of an established jewellery retailer with a rich product portfolio and widespread reach. The company's diverse brand offerings allow it to cater to varying customer preferences, which is reflected in its strong subscription demand. With a focus on innovation and market responsiveness, Senco Gold seems poised for further growth and success in the jewellery sector.