Incorporated in 1994, Senco Gold Limited is a pan-India jewelry retail player. It is the largest organized players in eastern India based on its number of stores. It primarily deals in gold and diamond jewelry along with jewelry made of silver, platinum, precious and semi-precious stones, and other metals. Besides this, it offers costume jewelry, gold, and silver coins, and utensils made of silver in its other offerings.
• Total issue of ~Rs. 405 Cr (at upper price band) consists of fresh issue worth Rs. 270 Cr and offer for sale worth Rs.135 Cr
• To utilize an estimated amount of ₹ 196 Cr from the net proceeds towards the funding of company’s working capital requirement
• Leading organized jewelry player with a strong brand name
• Expansion of its presence through strong distribution channels
• Established low cap-ex business model to improve operating leverage
• Focusing on optimal product mix in order to achieve higher operating margins
• Focus on technology to enhance operational efficiency while targeting youth and upwardly mobile in India
Senco Gold has positioned well in the eastern India and other non-eastern regions with its legacy of last five decades of journey. It has delivered 24% revenue growth over FY21-23 with margin improvement from 6.6% in FY21 to 7.8% in FY23. Although, company’s decent performance in terms of profitability amongst its peers, it has observed challenges generating positive operating cash flow during the last 2 years. Further, debt to equity ratio at 1.2x as on Mar’23 may lead to further contraction in company’s profitability. However, the IPO is issued at 15.5x PE valuation based on its FY23 EPS which is at discount relative to average PE valuation of its peers.
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