Senco Gold IPO subscribed 6.5 times on last day so far, QIB portion booked 114x

The initial public offering (IPO) of Senco Gold witnessed a strong response from the investors during the third and final day of the bidding process, as the institutional investors also joined retail investors and non-institutional bidders (NIIs). The issue was subscribed 69 per cent on day 1 and 3.67 times on day 3. Senco Gold is selling its shares in the range of Rs 301-317 apiece, with a lot size of 47 equity shares. The issue includes fresh equity shares amounting to Rs 270 crore and an offer-for-sale (OFS) of Rs 135 crore from its existing shareholders existing SAIF Partners India IV. The Rs 405-crore IPO closes for subscription on Thursday, July 6.

According to BSE, the investors made bids for 48,61,27,909 equity shares, or 51.61 times, compared to the 94,18,603 equity shares offered for the subscription by 3.20 pm on Thursday, July 06, 2023. The quota for retail investors was booked 13.45 times, while the allocation for non-institutional bidders fetched 57.27 times bids. Portion of qualified institutional bidders was booked 114.15 times.

Ahead of its IPO, Senco Gold raised Rs 121.50 crore from 21 anchor investors by allocating 38,32,807 equity shares at Rs 317 apiece to them, a BSE circular said. Anchor investors included Ashoka Whiteoak Emerging Markets Trusts, Jupiter India Fund, Sundaram Mutual Funds, Bandhan Emerging Business Fund, Templeton India, 3P India Equity Fund among others. Incorporated in 1994, Senco Gold is a pan-India jewelry retailer, which sells its products under its brand name 'Senco Gold & Diamonds' through its 136 showrooms across 96 cities and towns in 13 states throughout the country. It is the largest organized jewelry retailer in eastern India in terms of number of stores. Brokerage firms are majorly positive on the issue and suggest investors to subscribe for it citing the growth potential, strong market share, sound financial performance and structural shift. However, others believe that the issue is aggressively priced, leaving limited upside potential on the table. At the upper and lower end of the price band, the company is valued at 14.8 times and 15.5 times its FY2023 earnings and 10.4 times and 10.8 times its FY2023 EV/EBITDA, which is a stark discount to large peers and reasonable discount to closest peers, said Sharekhan. "The company has a strong business model with a good return profile, which is expected to further improve in the coming years based on the shift happening from unbranded to branded players in the key markets," it added in the report. For the financial year ended on March 31, 2023, the company reported a net profit at Rs 158.48 crore, compared to Rs 129.10 crore in the year ended on March 31, 2022, while its total revenue stood at Rs 4,108.54 crore in FY23, which was Rs 3,547.41 crore in the previous financial year. It has delivered 24 per cent revenue growth over FY21-23 with margin improvement from 6.6 per cent in FY21 to 7.8 per cent in FY23. The company’s decent performance in terms of profitability amongst its peers, it has observed challenges generating positive operating cash flow during the last 2 years, said Nirmal Bang Securities with a 'subscribe' rating. IIFL Securities, Ambit Capital and SBI Capital Markets are book-running lead managers to the issue, while Kfin Technologies has been appointed as the registrar. Shares of the company will be listed on both BSE and NSE, with July 14 as the tentative date of listing.(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Business Today)

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