Vaibhav Jewellers IPO: Key Details and Analysis
Vaibhav Jewellers, a hyperlocal jewellery retail chain with presence in Andhra Pradesh and Telangana, has announced its maiden public issue (IPO) with a price band of Rs 204-215 per share. The bidding for the offering will take place for three working days from September 22 to September 26, 2023.
The IPO comprises a fresh issuance of shares worth Rs 210 crore and an offer-for-sale (OFS) of 28 lakh shares worth Rs 60.2 crore by promoter Grandhi Bharata Mallika Ratna Kumari (HUF). The net proceeds from the fresh issue will be utilized to fund the establishment of eight new showrooms and for general corporate purposes.
The company has reserved half of the offer size for qualified institutional buyers (QIBs), 15 percent for high networth individuals (HNIs), and the remaining 35 percent for retail investors. Investors can bid for a minimum of 69 equity shares and in multiples of 69 shares thereafter.
Financials
Vaibhav Jewellers has recorded healthy earnings growth in past financial years with profit growing at a CAGR of 85.81 percent during FY21-FY23 to Rs 71.6 crore in the financial year ended 2022-23, and the revenue from operations increasing at a CAGR of 18.92 percent during the same period to Rs 2,027.34 crore.
The EBITDA (earnings before interest, tax, depreciation and amortisation) at Rs 143 crore in FY23 grew at a CAGR of 43.42 percent in the years during FY21-FY23, and the margin increased from 4.85 percent in FY21 to 7.06 percent in FY23.
Analysis
Vaibhav Jewellers is a well-established jewellery retailer with a strong track record of growth. The company has a strong presence in Andhra Pradesh and Telangana, and it is expanding its reach to other markets. The company’s IPO is reasonably priced and offers investors an opportunity to invest in a growing business.
However, investors should note that the jewellery retail industry is competitive and the company faces risks such as fluctuations in gold prices, changes in consumer preferences, and economic downturns.
Overall, Vaibhav Jewellers IPO is a good investment opportunity for investors with a long-term investment horizon and a risk appetite.
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