Manoj Vaibhav Gems 'N' Jewellers GMP slide ahead of listing; what should you expect?

Shares of Manoj Vaibhav Gems 'N' Jewellers (MVGJL) are set to make a flat or muted debut at Dalal Street on Tuesday, October 3. If one believes the signals from the grey markets, the company is likely to be the latest addition in the weak listings of Dalal Street in the recent weeks.

Last heard, Manoj Vaibhav Gems 'N' Jewellers had lost the entire momentum in the grey market it built up ahead of its IPO. The company was commanding no premium in the unofficial market or in other words, the trades, if any, were happening at par. However, the premium in the grey market stood close to Rs 18-20 when the issue was open for bidding.

According to the analysts, tracking the primary markets and grey market signals, Manoj Vaibhav Gems 'N' Jewellers is likely to disappoint investors on its debut on the back of lower coverage and low subscription. However, they seem to be positive for the counter in their longer run.

"Manoj Vaibhav Gems ‘N’ Jewellers IPO received a tepid subscription, we expect a flattish opening for the issue. The company has displayed steady growth in revenue and even more robust profit growth which is up more than three-fold in two years. It boasts of a 23 per cent return on equity in FY23, attractive compared to its listed peers," said Dhruv Mudaraddi, Research Analyst at StoxBox.

They plan to open eight new stores to target more Tier 2 and Tier 3 markets which augurs well as rural markets contributed 50-52 per cent of the total jewellery market in FY23. Based on the prospects of the sector, the company’s product catalogue, its stronghold in the southern markets and a good track record, there's a positive view on the stock in the medium-to-long term, he said.

Manoj Vaibhav Gems 'N' Jewellers offered its shares in the price band of Rs 204-215 per share with a lot size of 69 equity shares to raise a little more than Rs 270.20 crore. Of the block, Rs 210 crore constitutes the sale of fresh equity shares, while remaining Rs 60.20 crore shall be raised by offer-for sale (OFS) of up to 28 lakh equity shares.

The issue was overall subscribed 2.33 times, with NIIs allocations getting subscribed for 5.40 times, retail quota getting 1.73 times bids and QIB portion fetching 1.08 times bids. The issue was managed by Bajaj Capital and Elara Capital (India) are the lead managers to the issue, while Bigshare Services was the registrar for this IPO.

Incorporated in 2003, Vaibhav Jewellers is a South India-based regional jewelry company which offers gold, silver jewellery, diamond jewellery, precious gemstones, and other jewellery products. It sells its product range through its retail showrooms in micro markets of Telangana and Andhra Pradesh and through its website.

Also read: Manoj Vaibhav Gems 'N' Jewellers IPO booked over 2 times; NIIs lead bidding process

Also read: Manoj Vaibhav Gems 'N' Jewellers IPO: All you need to know

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