Multibagger Jewellery Stock Under Rs 15: Fourteen Banks Bought PC Jewellers Shares Worth Over Rs 1,500 Crore at A 100 Per Cent Premium to Current Rate
The stock gave multibagger returns of 226 per cent from its 52-week low of Rs 4.41 per share.
Today, shares of PC Jeweller Ltd surged 2.27 per cent to Rs 14.40 per share from its previous closing of Rs 14.08 per share. The stock’s 52-week high is Rs 19.60 per share and its 52-week low is Rs 4.41 per share.
PC Jeweller has executed a significant financial restructuring by allotting 51,71,14,620 new equity shares to a consortium of 14 banks at an issue price of Rs 29.20 per share. This move, approved by the company's members and regulatory bodies, aims to settle a substantial portion of the company's outstanding debt, amounting to Rs 1509,97,46,904. The allotment was made through a preferential route, specifically targeting the lending banks, and was conducted in compliance with SEBI regulations. The decision reflects a strategic effort to alleviate financial pressure and strengthen the company's balance sheet by converting debt into equity. This restructuring was facilitated by a Joint Settlement Agreement dated September 30, 2024, highlighting a collaborative approach between PC Jeweller and its lenders to address the company's financial challenges.
The distribution of shares among the 14 banks reveals a tiered allotment, with the State Bank of India receiving the largest allocation of 17,66,46,350 shares, reflecting its significant exposure to PC Jeweller's debt. Other major beneficiaries include Union Bank of India (8,29,96,900 shares) and Punjab National Bank (6,99,65,610 shares). This allocation is directly proportional to the outstanding debt owed to each lender, ensuring a fair conversion of debt into equity. The issue price of Rs 29.20 per share, determined in accordance with SEBI regulations, serves as the benchmark for this conversion, translating the debt into a specific number of shares for each bank. This structured allotment ensures the debt settlement is transparent and aligned with regulatory requirements.
The allotment of these new shares has directly impacted PC Jeweller's capital structure, increasing the paid-up equity share capital from Rs 583,81,69,480 to Rs 635,52,84,100. This increase reflects converting a significant portion of debt into equity, thereby altering the company's debt-to-equity ratio. The new shares rank pari-passu with existing shares, ensuring that the consortium lenders have the same rights as other shareholders. The process, which followed a sub-division of the face value of shares, underscores a comprehensive financial restructuring effort aimed at stabilizing the company's financial position and fostering long-term sustainability. This move allows PC Jeweller to reduce its debt burden while providing the lending banks with an equity stake in the company's future.
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About the Company
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.
Quarterly Results: The net sales increased by 1,496 per cent to Rs 639.45 crore in Q3FY25 compared to Q3FY24. The company reported a turnaround net profit of Rs 147.96 crore in Q3FY25 compared to a net loss of Rs 197.87 crore in Q2FY24: increasing 175 per cent.
Nine-Month Results: The net sales increased by 177 per cent to Rs 1,545 crore in 9MFY25 compared to 9MFY24. The company reported a turnaround net profit of Rs 483 crore in 9MFY25 compared to a net loss of Rs 508 crore in 9MFY24: increasing 195 per cent.
PC Jeweller Limited has an ex-traded stock split of each of its existing 1 equity shares, each with a face value of Rs 10, into 10 smaller shares, each with a face value of Re 1. The record date for the stock split was Monday, December 16, 2024. The company has a market cap of over Rs 7,500 crore. As of December 2024, the Life Insurance Corporation of India (LIC) owns a 1.16 per cent stake in the company and FIIs increased their stake to 5.55 per cent compared to September 2024. The stock gave multibagger returns of 226 per cent from its 52-week low of Rs 4.41 per share. Investors should keep an eye on this Small-Cap stock.
Disclaimer: The article is for informational purposes only and not investment advice.