New Delhi: The IPO market is getting a new glitter with jewellers lining up public issues to raise funds for expansion plans, as consumers’ appetite for luxury purchases grows.
Renaissance Jewellery and Shree Ganesh Jewellers are planning to raise close to Rs400 crore from domestic market.
Two other players — PP Jewellers and Mehrasons Jewellers — are also planning IPO in the near future.
Five key players from this segment are already listed in India and the market is expecting more issues from this segment as the surge in the consumers’ disposable income is pushing up the demand for gems and jewellery. Other than funds, the brand-value attached to a listed company is also attracting the jewellers.
“It is encouraging that jewellery companies are realizing the benefits of getting listed on Bombay Stock Exchange,” Kejriwal Research and Information Services (KRIS) head Arun Kejriwal said.
“Raising money from equity market is easier, cheaper and faster compared to debt market. Besides, getting listed gives an identity in a competitive market,” he said.
“It not only brings transparency in business, but also boosts confidence to start new projects,” Gems and Jewellery Export Promotion Council chairman, Sanjay Kotari, said.
Mumbai-based Renaissance Jewellery, a leading exporter of studded gold and platinum jewellery is raising Rs80 crore and has set a price band of Rs125-150 a share.
The proceeds would be used to fund expansion at jewellery units in Bhavnagar and Mumbai and invest in its US subsidiary, Renaissance Jewellery New York, it said in its IPO prospectus.
Kolkata-based Shree Ganesh Jewellers is likely to go public by March next year.
“We are planning to enter the capital market with an IPO to raise Rs210-300 crore. We are at the planning stage and it would take about two-three months to complete the process,” Shree Ganesh Jewellers chairman Nilesh Parekh said.
Besides, Delhi-based Mehrasons Jewellers and P P Jewellers are also warming up their way to the capital market.
“We are looking at IPO definitely... possibly next year after we complete the projects we have already lined-up,” PP Jewellers, Director Pawan Gupta said.
Mehrasons Jewellers chief Ajay Mehta said, “We have plans, but it is early to say.. it may take up to 2-3 years.”
The growing IPO interest could be attributed to robust performance by some listed players, market observers said.
Out of the five major listed companies from this segment, three have seen a robust surge in their share prices. Rajesh Exports has seen a jump of 145.19% since the beginning of this year, while Flawless Diamond has surged nearly 100%.
Similar trend was seen in Gitanjali Gems, whose share price rose 76% this calender.
However, shares of Vaibhav Jems and Classic Diamonds did not cheer investors as their share prices declined by 38.42% and 11.53% respectively.
But the recent trend in overseas markets does not bode well for jewellery IPOs. China’s FUQI International Inc recently debuted on the Nasdaq market in the US, but its shares are trading below the offer price.
Italian jewellery maker Damiani SpA, which sells a product co-designed with Hollywood actor Brad Pitt, raised €137 million through an IPO earlier this month but its shares have dropped below the offer price.