Vaibhav Jewellers launches IPO with plans to raise Rs 270.20 crore

The initial public offering (IPO) of South Indian jewelry brand, Manoj Vaibhav Gems 'N' Jewellers (Vaibhav Jewellers), opened for subscription on Friday. The company has set a price band of Rs 204-215 per equity share, with the bidding process set to conclude on Tuesday, September 26.

The company aims to raise Rs 270.20 crore from its IPO, which includes a fresh issue of equity shares worth Rs 210 crore. Its promoter Grandhi Bharata Mallika Ratna Kumari (HUF) will offload 28,00,000 shares, aggregating to Rs 60.20 crore through the offer for sale (OFS) route.

Vaibhav Jewellers intends to use the net proceeds from the fresh issue sale towards financing the proposed eight new showrooms, including capital expenditure and inventory costs of new showrooms and for general corporate purposes. Proceeds from the OFS will go to the selling shareholders.

Prior to the IPO, Vaibhav Jewellers raised Rs 81.06 crore from eight anchor investors including Quantum-State Investment Fund, Tano Investment Opportunities Fund, Nexus Global Opportunities Fund, Coeus Global Opportunities Fund, Neomile Growth Fund, AG Dynamic Funds, Chhatisgarh Investments and Eminence Global Fund investors by allocating 37,70,160 equity shares at Rs 215 apiece.

Incorporated in 2003, Vaibhav Jewellers offers gold, silver, and diamond jewelry; precious gemstones; and other jewelry products through its retail showrooms and website. The company caters to both rural and urban markets in Telangana and Andhra Pradesh through their 13 showrooms, including two franchisee showrooms.

For the period ended on June 30, 2023, Vaibhav Jewellers reported a net profit of Rs 19.24 crore, with a revenue of Rs 510.21 crore. For the financial year ended March 31, 2023, its net profit stood at Rs 71.60 crore and revenue came in at Rs 2,031.30 crore.

The IPO has reserved 50 per cent of equity shares for qualified institutional bidders (QIBs), while non-institutional investors will get 15 per cent of the offer. Retail investors will have the remaining 35 per cent shares reserved for them.

Elara Capital (India) and Bajaj Capital are the book running lead managers to the issue, while Bigshare Services is the registrar for the issue. Shares of the company will be listed on both BSE and NSE.

Brokerage firms have a mixed view on the issue. StoxBox of BP (NYSE:BP) Equities recommends a 'subscribe' rating to the issue, citing the company's product catalogue, stronghold in southern markets and good track record. Sushil Finance has a 'neutral' view on the issue, noting that the IPO price band is attractively priced compared to industry averages.

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