Senco Gold IPO Details

 

In the world of investments, Initial Public Offerings (IPOs) often catch the attention of both seasoned investors and newcomers alike. One such IPO that has generated significant interest is the Senco Gold IPO. Senco Gold, a renowned jewelry brand based in India, is coming with its initial public offering (IPO). The IPO will be open for subscription on 4^th July -2023 and will close on 6^th July 2023. Through IPO company is looking to raise Rs.405 crores out of which Rs.270 crores will be fresh issue and remaining Rs.135 crores will be offer for sale.            

In this blog will cover details of the Senco Gold IPO, the company's background, financial performance, growth prospects, and potential risks.

 

Senco Gold IPO Review – About the Company

 

Senco Gold Limited, a pan-India jewelry retailer that sells products under its brand name "Senco Gold & Diamonds," was established in the year 1994.

Senco Gold primarily sells gold and diamond jewelry, along with jewelry made of silver, platinum, precious and semi-precious stones, and other metals. The company also offers costume jewelry, as well as gold and silver coins and silver utensils.

With a catalog of more than 120,000 designs for gold jewelry and over 69,000 designs for diamond jewelry, the company offers a variety of handcrafted jewelry designs, most of which are created and manufactured in-house. The collaboration involves over 170 skilled local craftsmen in Kolkata and across the country. As of March 31, 2023, the company has a team of 20 designers. Additionally, the company manufactures machine-made lightweight jewelry in gold and diamonds and sources jewelry from third-party vendors.

Senco Gold IPO-Important Details

IPO Subscription Date	4-July to 6-July-2023
Listing Date	14-Jul-23
Face Value	₹10 per share
Price	₹301 to ₹317 per share
Lot Size	47 Shares
Minimum Lot Size	1 (47 Shares)
Maximum Lot Size	13 (611 Shares)
Total Issue Size	₹405 Cr
Fresh Issue	₹270 Cr
Offer for Sale	₹135 Cr
Listing At	BSE, NSE

Senco Gold IPO – Financials

 

If we examine the financials of Senco Gold Limited, we can observe that their assets have increased from Rs 1559.30 Crores to Rs 2905.32 Crores from FY21 to FY23. Similarly, the company's revenue has risen from Rs 2,674.92 Crores to Rs 4,108.54 Crores during the same period.

Further, the net profits of the company have increased from Rs 61.48 Crores to Rs 158.48 Crores from FY21 to FY23. Additionally, the revenue compound annual growth rate (CAGR) of the company has been 15.36%, while the profit for the year has grown at a CAGR of 22.75% from Fiscal 2022 to Fiscal 2023.

Another significant metric to consider here is the company's borrowings, which have substantially risen from Rs 532.44 Crores in FY21 to Rs 1,177.17 Crores in FY23.

 

Senco Gold -Financial summary:

 
Senco Gold - Balance Sheet

Senco Gold - Peers:

Senco Gold  - Strength 

The kind of business Senco Gold Limited deals in requires strong authenticity. With a strong brand name and a legacy of over five decades, Senco Gold Limited has earned the trust of numerous customers.

Since 2012, the company has been implementing BIS Hallmarking on all its gold jewelry, even before it became mandatory in 2021. This proactive approach by the company to ensure transparency in its operations has significantly boosted trust, which is a major strength for the company.

The company has focused extensively on lightweight and affordable jewelry, catering to the design preferences of the younger generation. This is regarded as a core competency of the company, especially since the working-age population (15-64 years) as a proportion of the total population has increased from 65% in 2013 to 67% in 2021, directly impacting the company's revenue.

Senco Gold  - Weakness 

The company operates in a highly competitive market with several well-established gold and jewelry companies. If these companies offer products at competitive prices, it may create threat for Senco Gold Limited.

Due to the need for continuous growth, the company requires a substantial amount of working capital. Therefore, a potential lack of working capital in the future could have an adverse impact on the company's financial position.

In the past, the company underwent a "search and seizure" operation conducted by the Income Tax Department, leading to taxation and criminal proceedings against both our company and our Individual Promoter. Any unfavorable outcomes from these proceedings could negatively impact our business.

Given the volatility of gold and diamond prices, which are influenced by various national and international factors, there is a possibility that this could affect the company's revenue and profitability.

Senco Gold - GMP 

According to top share brokers, the Senco Gold IPO is currently trading at a premium of Rs. 102. If this trend persists, the share price could potentially list around 400, allowing investors to gain a profit of approximately 31% on the day of listing.