PC Jeweller Ltd.’s stock hit the upper circuit as FM Minister Nirmala Sitharaman reduced custom duty on gold and silver to 6 per cent and platinum to 6.4 per cent!

The stock gave multibagger returns of 191.4 per cent from its 52-week low of Rs 25.45 per share.

The Indian government's budget announcement included significant positive developments for the gems and jewellery sector. A key takeaway was the reduction in customs duty on precious metals. The duty on gold and silver was slashed to 6 per cent, while platinum will see a 6.4 per cent duty. This move is expected to bring down retail prices of gold and silver jewellery, potentially leading to a rise in consumer demand. It also aims to boost domestic value addition in this industry.

Furthermore, the government announced the complete removal of customs duties on 25 critical minerals. This will make it cheaper to import these materials, which are essential for jewellery making. Additionally, the budget included measures to streamline export-import processes and support the lab-grown diamond sector. These initiatives, combined with the duty reduction on precious metals, paint a bright picture for the future of India's gems and jewellery industry. The industry is expected to reach US$100 billion by 2027, and the recent budget announcements are likely to accelerate this growth.

Today, shares of PC Jeweller Ltd were locked in a 5 per cent upper circuit to an intraday high of Rs 74.16 per share from its previous closing of Rs 70.63. The stock also made a 52-week high of Rs 7 while its 52-week low was Rs 25.45.

PC Jeweller Ltd is an Indian company that designs, manufactures, sells and trades gold, platinum, diamond and silver jewellery. They operate across India with multiple brands including Azva, Swarn Dharohar and LoveGold, and even created commemorative medallions for the Cricket World Cup. According to its Quarterly Results (Q4FY24) and annual results (FY24), the company reported a mixed set of numbers.

Earlier, the company secured approval for their One-Time Settlement (OTS) proposal from both Bank of Baroda and IndusInd Bank, allowing them to resolve outstanding dues through a combination of cash and equity payments. The banks will also release any securities or mortgaged properties they hold as collateral. This positive development comes after PC Jeweller's board greenlit the issuance of convertible warrants worth Rs 2,705.14 crore to both promoters and public investors. The funds raised will be used to pay off bank loans (Rs 2,025 crore), address working capital needs (Rs 529.69 crore), manage general corporate expenses (Rs 150 crore), and cover issuance costs (Rs 0.45 crore). Specific details about the warrant allocation between promoters and non-promoters (each receiving 15 crore warrants) will be revealed later.

The company has a market cap of Rs 3,450 crore. The shares of the company are trading at 1.18 times its book value. As of June 2024, Life Insurance Corporation of India (LIC) owns a 1.45 per cent stake in the company and FIIs have increased their stake to 2.57 per cent compared to 0.93 per cent in December 2023. The stock gave multibagger returns of 191.4 per cent from its 52-week low of Rs 25.45 per share and investors should keep an eye on this Small-Cap stock.

Disclaimer: The article is for informational purposes only and not investment advice.