Senco Gold Opens At A Premium Of 36%. Know Its Financials Before Investing In This Highly Profitable IPO

Senco Gold is the first listing in the jewellery industry, with a robust subscription and issue price after the IPO of Kalyan Jewellers.

The initial public offer of Senco Gold

Senco Gold is a Kolkata-based jewellery retailer with a robust brand name in eastern India. It has healthy financials, strong valuations and a better franchise model than any listed peers. The analysts have expected Senco Gold listings to be at 35 to 40% premium. The initial public offer (IPO) of Senco Gold got an overwhelming response from subscribers between 4 July to 6 July. This was the 2nd highest subscription in this calendar year after Ideaforge Technologies. Senco Gold jumps. 

  • Senco Gold started at Rs 431 on BSE against the issue price of Rs 317 per share
  • It opened at a 35-40 per cent premium, while the grey market premium was 41 per cent over the issue price
  • It has a debt-to-equity ratio of 1.2 and has been given a “subscribe” rating by analysts
  • Senco Gold has raised Rs 405 crores from public issues and new shares

Also Read: How IPO and NFO are different from each other?

What is the issue price of Senco Gold?

Senco Gold shares were issued at a discount to all the listed investors based on the financial year 2023. On 14 July, Senco Gold's share price was listed at a 35.96 per cent premium of Rs 431. Titan traded at 83.5x P/E, and Kalyan Jewellers at 35x P/E. At the same time, Senco Gold was trading at 15.5x P/E with a market cap of Rs 2462 crore. 

Furthermore, it is estimated that the jewellery showroom networks will expand by 8.5% CAGR while the operating retail sales area will increase by 8.1% CAGR over FY23-25. As a result, the consolidated operating revenue will be at Rs 5334.2 crore by FY25, and the growth rate will be 14.4% CAGR. EBITDA and PAT will be at 8% and 4.1% by FY25.  

What are the financials of Senco Gold?

By issuing shares worth Rs 270 crores and through public issues, Senco Gold has raised Rs 405 crores. The company will use this amount to meet its working capital requirements. The shares were offered at the price band of Rs 301- 317 for one share. 

While recommending “Subscribe”, experts pointed out that the company has shown a decent performance in profitability. It has a debt-to-equity ratio of 1.2, a big challenge to its profitability. 

The company’s books had a debt of Rs 863 crore in FY22, which increased to Rs 1177.2 crore at the end of FY23. The company's operations and investing cash flow increased from Rs 70 to Rs 76 crore and Rs 157 to Rs 198 crore from FY22 to FY23.

Also Read: Know which 4 new IPOs and 6 new listings are launched in the stock market.  

Senco’s opening met the expected lines with a robust IPO subscription. High-net-worth and qualified investors started showing interest, subscribing over 181 times to the shares, while 15.5 times were reserved for retail investors. 

Find the latest articles on stocks here.

Disclaimer: This article is intended for general information purposes only and should not be construed as investment or tax or legal advice. You should separately obtain independent advice when making decisions in these areas.


Related Article

Premium Articles

Union Budget