Golden investment: PNG IPO ready to sparkle
Between FY22 and FY24, the company recorded a Compound Annual Growth Rate (CAGR) of 54 per cent in revenue and 49 per cent in net profit.
About the issue
P N Gadgil Jewellers Ltd is preparing to launch its Initial Public Offering (IPO) for equity shares. Below are the IPO details.
| IPO Details |
| IPO Opening Date |
September 10, 2024 |
| IPO Closing Date |
September 12, 2024 |
| Issue Type |
Book Built Issue IPO |
| Face Value |
Rs 10 per equity share |
| IPO Price |
Rs 456 to Rs 480 per equity share |
| Min Order Quantity |
31 shares |
| Listing At |
BSE, NSE |
| Total Issue |
22,916,667 shares of FV Rs 10* |
| (Aggregating up to Rs 1,100 Cr)* |
| Fresh Issue |
17,708,334 shares of FV Rs 10* |
| (Aggregating up to Rs 850 Cr)* |
| Offer for Sale |
5,208,333 shares of FV Rs 10* |
| (Aggregating up to Rs 250 Cr)* |
| QIB Shares Offered |
50% of the Offer |
| Retail Shares Offered |
35% of the Offer |
| NII (HNI) Shares Offered |
15% of the Offer |
| *At Upper Price Band |
|
Objects of the Issue
The offer encompasses both the fresh issue and the offer for sale. It's important to note that the company will not accrue any proceeds from the offer for sale. The company plans to allocate the net proceeds raised from the fresh issue for the following purposes:
1. Funding expenditure towards setting up 12 new stores in Maharashtra
2. Repayment or pre-payment, in full or part, of certain borrowings availed by the company
3. General corporate purposes
Promoter holding
Saurabh Vidyadhar Gadgil, Radhika Saurabh Gadgil, and SVG Business Trust are the promoters of the company. The promoters and promoter group currently hold a pre-issue shareholding stake of 100 per cent in the company.
Company profile
The 'PNG' brand carries a rich heritage dating back to 1832, with over a century of legacy. The company has established strong brand recall and a significant presence in Maharashtra, offering an extensive range of precious metal and jewellery products, including gold, silver, platinum, and diamond pieces, available across various price points and designs.
The majority of products are marketed under the flagship brand 'PNG', alongside several sub-brands across multiple channels. As of July 31, 2024, the company boasts eight sub-brands focused on gold jewellery collections for different occasions, two sub-brands dedicated to diamond jewellery collections, and two sub-brands for platinum jewellery collections.
As of March 31, 2024, the company’s product portfolio includes over 10,000 SKUs (stock keeping units) in gold, more than 1,200 SKUs in silver, over 2,700 SKUs in platinum, and more than 24,000 SKUs in diamond jewellery designs.
By July 31, 2024, the company's retail footprint had expanded to 39 stores, including 38 stores across 21 cities in Maharashtra and Goa, and one in the U.S., with a total retail space of approximately 108,282 sq. ft. As of January 2024, the company ranked as the second-largest organised jewellery player in Maharashtra by store count, the largest market for BIS-registered outlets in India.
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Financials
| Rs (in crore) |
FY22 |
FY23 |
FY24 |
| Revenue |
2,586.31 |
4,559.31 |
6,119.10 |
| Profit before tax |
85.03 |
118.08 |
208.36 |
| Net Profit |
69.52 |
93.69 |
154.16 |
The company has truly shone like gold, delivering consistent and impressive growth in both its top line and bottom line over the past few years. The company stands as the fastest-growing jewellery brand among the key organised players in India, driven by its exceptional growth between Fiscal 2022 and Fiscal 2024.
Between FY22 and FY24, the company recorded a Compound Annual Growth Rate (CAGR) of 54 per cent in revenue and 49 per cent in net profit. In FY24, the company reported an impressive Return on Equity (RoE) of 29 per cent and a Return on Capital Employed (RoCE) of 27 per cent.
Valuation and outlook
| Company Name |
P/E |
P/B |
RoE (%) |
| P N Gadgil Jewellers Ltd |
37 |
5 |
29 |
| Listed Peers |
| Kalyan Jewellers India Ltd |
105 |
15 |
15 |
| Senco Gold Ltd |
46 |
7 |
16 |
| Thangamayil Jewellery Ltd |
48 |
11 |
28 |
The issue is priced with a P/BV ratio of 10.60 times, calculated using its Net Asset Value (NAV) of Rs 45.29 as of March 31, 2024. At the upper price cap, it is priced at a P/BV ratio of 4.71 times, considering its post-IPO NAV.
When we calculate the PE ratio for the company by considering the FY24 earnings relative to the fully diluted paid-up equity capital, the resulting PE ratio stands at 37.
Considering both valuation and returns, the company has significantly outperformed its listed peers.
CRISIL recently projected up to a 25 per cent revenue boost due to the import duty cut, while favourable economic policies, the growth of organised retail, and expanding product portfolios have further strengthened the industry's position.
With the upcoming festive and wedding season expected to drive significant demand, along with the company's plans to expand its store network, we recommend investors consider subscribing to the issue. Given the company's strong financial track record, this recommendation is made with a long-term investment perspective.