Senco Gold Limited IPO - GMP, Review, Issue Date & Valuation

Senco Gold Limited - Complete Overview

Senco Gold Limited, established in 1994, is a renowned jewellery retail player operating across India. Over the years, the company has gained a strong reputation and trust among people throughout the country. It holds a significant presence in the eastern region and proudly stands as the largest organized jewellery retail player in that part of India.

Senco Gold Limited sell gold and diamond jewellery, as well as jewellery made from silver, platinum, precious stones, semi-precious stones, and other metals. They also offer costume jewellery, gold and silver coins, and silver utensils. 
Senco Gold Limited offers a diverse collection of jewellery designs, showcasing a catalogue of over 108,000 designs for gold jewellery and more than 46,000 designs for diamond jewellery.

Operating under the tradename "Senco Gold & Diamonds," the company sells its products through various channels. This includes 70 company-operated showrooms, 57 franchisee showrooms, and online platforms, located across 89 cities and towns in 13 states across India.

To continually innovate and create new products and designs, Senco Gold Limited has a dedicated team of 13 in-house designers as of January 31, 2022. The company collaborate with over 100 experienced Karigars in Kolkata, West Bengal, and other regions of India.

In order to cater to the younger generation and the upwardly mobile individuals of India, Senco Gold Limited has introduced brands like Everlite (lightweight jewellery), Gossip (silver and fashion jewellery), and the Aham collection (jewellery for men). These brands focus on offering jewellery with smaller average ticket sizes.

For customers seeking heavier or premium designer jewellery or a more luxurious shopping experience, the company provides D'Signia Showrooms and the Vivaha collection.
The average ticket sizes differ across their showrooms. The standard showrooms have an average ticket size of ?46,000.00, D'Signia showrooms have an average ticket size of ?51,00,000.00, and Everlite showrooms have an average ticket size of ?24,000.00, each for the ten-month period from April 1, 2021, to January 31, 2022.

 

 

What does the company do?

Senco Gold Limited is a jewellery brand specializing in the retail of gold and diamond jewellery. They offer a wide range of jewellery made from silver, platinum, precious stones, semi-precious stones, and various other metals. They provide costume jewellery, gold and silver coins, and silver utensils to cater to diverse customer preferences.

 

Company Products 

Senco Gold Limited offers a diverse range of jewellery, including gold jewellery, diamond jewellery, silver jewellery, platinum jewellery, costume jewellery, gold and silver coins, a selection of silver utensils, jewellery of precious stones, semi-precious stones, and other metals.

           

 

IPO Overview

Senco Gold Limited's upcoming IPO is scheduled to launch on the stock market on July 4, 2023. Investors will have the opportunity to apply for the IPO until July 6, 2023. The company has set the price band for the issue at a range of ?301 to ?317 per share, with a face value of Rs 10 per share.

Each lot of shares will consist of 47 shares, priced at Rs 14,899. The shares are expected to be listed on July 14, 2023. Retail investors have the opportunity to bid for a minimum of 1 lot and a maximum of 13 lots. The total issue size of the Senco Gold IPO is Rs 405 crore.

The company has decided to allocate, 50% of the shares to institutional investors, 15% to non-institutional investors, and 35% to retail investors.

 

Senco Gold Limited IPO timetable

EVENTS	DATE
IPO Opening Date	4 JULY 2023
IPO Closing Date	6 JULY 2023
IPO Allotment Date	11 JULY 2023
Refund initiation	12 JULY 2023
IPO Listing Date	14 JULY 2023

 

Senco Gold Limited IPO Details

IPO Opening & Closing Date	04 July 2023 to 06 July 2023
Face Value	Rs 10 per share
Issue Price	301 to 317 Per share
Lot Size	47 Shares
Price of 1 Lot	Rs 14,899
Issue Size	405.00cr
Offer for Sale	135.00cr
Fresh Issue	270.00cr
Listing at	BSE, NSE
Issue Type	Book Built Issue IPO
Registrar	Kfin Technologies Ltd.

 

Senco Gold Limited IPO Lot Details 

Minimum Lot Investment (Retail)	1 Lot
Maximum Lot Investment (Retail)	13 Lot
Minimum Lot Investment (HNI)	14 Lot
Maximum Lot Investment (HNI)	67 Lot

 

Senco Gold Limited IPO Reservation

Institution Portion	50%
Non-institution Portion	15%
Retail Portion	35%

 

Company Financial

Amount in crores

Period	FY 21	FY 22	FY 23
Total Assets	1,559.30	2,100.19	2,905.32
Total Revenue	2,674.92	3,547.41	4,108.54
Net Profit	61.48	129.10	158.48
Net Worth	602.51	725.77	944.97
Reserve & Surplus	536.53	659.46	876.27
Total Borrowing	532.44	862.97	1,177.17

 

Revenue from Different Regions & Showrooms

	Fiscal 2023	Fiscal 2022	Fiscal 2021
Region	% of revenue from operations	% of revenue from operations	% ofrevenue from operations
West Bengal	69.50	72.38	69.86
East&North East	12.05	12.51	14.17
Rest of India	15.10	12.54	12.74
Others	3.36	2.57	3.22
Total	100.00	100.00	100%

 

Revenue from Sales Channels

Particulars	FY 23	FY 22	FY 21
COCO	26,695.02	21,997.10	16,547.09
Franchisee	12,904.99	12,595.47	9,337.63
Others	1,374.91	912.43	861.89
Total	40,974.93	35,505.00	26,746.61

 

Revenue from Different Showrooms

Particulars	FY 23	FY 22	FY 21
Standard	37,856.52	33,606.66	25,396.16
D’Signia	1,626.48	816.28	474.77
Everlite	117.01	169.63	13.79
Others	1,374.91	912.43	861.89
Total	40,974.92	35,505.00	26,746.61

 

The Objective of the Issue 

The company intends to utilize the funds raised from the Senco Gold IPO to meet its working capital requirements and for general corporate purposes.

 

Promoters and Management of Senco Gold Limited

Senco Gold Limited is supported by a team of experienced promoters. The company is led by Suvankar Sen, aged 38-year who serves as the Managing Director and Chief Executive Officer. Besides him, Jai Hanuman Shri Siddhivinayak Trust and Om Gaan Ganpataye Bajrangbali Trust are also included in the company's promoters. These promoters currently hold a significant stake in the company, which will be diluted following the issuance of shares.

 

Senco Gold IPO Promoter Holdings

Shareholding before the issue	76.92%
Shareholding after the issue	68.48%

 

Peer Comparison 

Senco Gold Limited faces competition from both organized and unorganized sectors within the jewellery retail business. This includes competition from online jewellery sellers, online marketplaces and also from regional players.

Company Name	SGIL	Titan	TJL	KJIL
Operating income (FY 23, Rs million)	40,774	3,37,060	31,530	1,40,714
Operating Income Growth	15%	38%	20.50%	56%
Operating Margin	8%	13.90%	4.90%	7.90%
Net Profit Margin	4%	9.20%	2.50%	3.20%
Inventory Days	174	163	120	208
ROCE	26%	31.90%	14.90%	10.50%
Working Capital Days	161	62	117	184
Gearing	1.2	0.2	1.6	0.7
Interest Coverage	4	20	5.6	3.7

 

IPO's Valuations

With a rich legacy spanning over five decades, Senco Gold Limited stands as a robust retail jewellery brand. It holds a prominent position as one of the largest jewellery retail players in the eastern region of India. The company boasts a market capitalization of Rs 2,462 crore and an impressive EPS of Rs 22.93 per share. Its RoNW stands at 10.65%, while the NAV per share is Rs 90.64. Furthermore, the company maintains a favourable P/E ratio of 15.53.

 

Senco Gold Limited KPI

KPI	VALUE
Market Cap (Rs)	Rs 2,462 crore
EPS (Rs per share)	22.93
RoNW (%)	10.65%
NAV (per share)	Rs 90.64
P/E (X)	15.53

 

Dividend Policy 

In the fiscal years 2019 and 2020, Senco Gold Limited did not pay any dividends on its equity shares. However, in FY21 to FY23, the company paid a 15% dividend. The company plans to adopt a robust dividend policy, considering various factors such as the financial performance of the company, the interests of shareholders, and the prevailing market conditions in the future.

 

IPO's Strengths 

Strong brand name with a rich legacy spanning over five decades.

The largest organized jewellery retail player in the eastern region of India based on the number of stores.

Robust systems and procedures to effectively mitigate risks and enhance operational efficiencies.

It maintains stringent quality control measures and deploys strong surveillance systems to ensure the integrity of its products.

The highly experienced management team and support from institutional investors

 

IPO Weaknesses 

The significant competition in the Indian jewellery market.

Adverse changes in regulations governing gold on a loan basis can potentially impact the company's financial condition and operational results.

Dependency on Karigars who do not exclusively work for Senco Gold Limited.

Involvement in legal cases poses a risk, as any adverse outcomes can have an impact on the company's financial condition.

 

 

IPO GMP 

The Current GMP of this IPO is Rs. 110.

 

Conclusion 

Operating within a competitive market, Senco Gold Limited has demonstrated strong financial performance over the past three years. With a heritage spanning five decades, it has earned a reputation as a trusted brand, offering a wide range of collections to cater to diverse customer needs. Considering these factors, the Senco Gold IPO could be considered for medium to long-term investments. However, it is advisable to thoroughly evaluate all relevant factors before making any investment decisions.
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