Shares of jewellery retailer Senco Gold made a stellar debut on the stock exchanges with its shares listing at a premium of 36% over the initial public offering (IPO) price, which was in line with Street expectations. The ₹405 crore IPO of the Kolkata-based company had received an overwhelming response from investors, as it was subscribed 73 times, the second highest this year after drone manufacturer Ideaforge Technologies.
Senco Gold shares opened at ₹431 apiece on the BSE and ₹430 on the NSE, a premium of 36% against the IPO price of ₹317. Post listing, the gold stock gained as much as 40% to hit a high of ₹443.80, while it touched a low of ₹409 on the BSE. On the NSE, the share touched a high and low of ₹444 and ₹408.6, respectively.
On the volume front, a total of 1.19 crore shares changed hands over the counter on the BSE and the NSE, while the market capitalisation rose to ₹3,230.8 crore.
The Suvankar Sen-led company had garnered strong response for its IPO as it received bids for over 69 crore shares as compared to 94.18 lakh shares on the offer. The quota reserved for qualified institutional investors (QIBs) was booked 181 times, while the non-institutional investors (NIIs) category was subscribed 65 times. The portion for retail investors attracted more than 15 times bid.
The three day IPO of Senco Gold opened on July 4 and closed on July 6, which comprised a fresh issue of equity shares aggregating up to ₹270 crore and an offer for sale (OFS) of equity shares up to ₹135 crore by a shareholder, SAIF Partners India IV Limited.
Ahead of the IPO, the pan-India jewellery retailer raised ₹121.50 crore from 21 anchor investors, including 5 domestic mutual funds through a total of 11 schemes, at the upper end of the price band at ₹317 per share. The key marquee investors that participated in the bid include Nippon MF, White Oak, Jupiter asset management, Bandhan MF, 3P India Equity Fund, Max Life Insurance, Sundaram MF, Franklin Templeton MF.
The company intends to utilise ₹196 crore of net proceeds from the fresh issue towards funding working capital requirements and the rest towards general corporate purposes. The firm, which primarily sells gold and diamond jewellery, generates nearly 85% of its revenues from gold jewellery, 10-11% from the sale of diamond jewellery, and the remaining 3-4% via sales of platinum, silver, and other products.
For the financial year 2022-23, the company’s revenue from operations stood at ₹4,075.56 crore compared to ₹3,534.64 crore in the previous fiscal. Meanwhile, profit after tax was at ₹160.91 crore against ₹130.15 crore in FY22.
As of March 31, 2023, Senco Gold has 136 showrooms (75 company operated showrooms and 61 franchisee showrooms) with a total area of approximately 409,882 sq. ft., in 96 cities and towns across 13 states in India. The company also sells products through various online platforms, while it also undertakes wholesale exports of its jewellery primarily to Dubai, Malaysia, and Singapore.
In a conversation with Fortune India, Suvankar Sen, MD and CEO, Senco Gold said that the company, which has a strong presence in Eastern and Northern India, follows a D-Mart-like expansion plan and wants to focus on these regions and penetrate into smaller towns. Sen also said that one of the strengths of Senco is the “Calcutta Karigari, which is like French wine, Belgian chocolate and we want to take this forward.”
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