Motisons Jewellers IPO: Issue gets oversubscribed 15.02 times on day 1, GMP steady; should you subscribe?

Motisons Jewellers IPO has opened for subscription on Monday, December 18, and will close on Wednesday, December 20. Within minutes of opening, the Motisons IPO was fully subscribed on its first day of subscription, receiving a blockbuster response from retail investors, and non institutional investors (NIIs).

Also Read: Motisons Jewellers IPO day 2 LIVE: Issue booked 37.19 times so far; check live subscription status, GMP, other details

Motisons IPO was booked 15.02 times at the end of day 1. Motisons Jewellers IPO's retail investors portion was subscribed 22.24 times, NII portion was subscribed 13.82 times, and QIB portion is booked 8%.

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Motisons Jewellers IPO price band has been fixed in the range of ₹52 to ₹55 per equity share of the face value of ₹10. Motisons Jewellers IPO garnered ₹36.3 crore from anchor investors on Friday, December 15. The Motisons Jewellers IPO lot size is 250 equity shares and in multiples of 250 equity shares thereafter.

Motisons Jewellers IPO has reserved not more than 50% of the shares in the public issue for qualified institutional buyers (QIB), not less than 15% for non-institutional Institutional Investors (NII), and not less than 35% of the offer is reserved for retail investors.

Also Read: Motisons Jewellers IPO day 1 subscription status: Issue booked 15.02 times, GMP jumps

Motisons Jewellers IPO details

Motisons Jewellers IPO comprises a fresh issue of shares of up to 2,74,71,000 equity shares of face value of ₹10 each, as per Red Herring Prospectus (RHP).

The company intends to use the net proceeds of the fresh offering to finance the following goals: meeting the company's working capital needs; general corporate purposes; and repaying the company's outstanding loans from scheduled commercial banks.

The registrar of the Motisons Jewellers IPO is Link Intime India Private Ltd, and the book running lead manager of the offering is Holani Consultants Private Limited.

Motisons Jewellers Limited sells jewellery crafted from gold, diamonds, and kundans in addition to other jewellery items made of metals like pearl, silver, platinum, and other alloys.

As per the company's RHP, its listed peers are Goldiam International Limited (with P/E of 27.55), DP Abhushan Limited (with P/E of 29.09), Thangamayil Jewellery Limited (with P/E of 24.08), and Renaissance Global Limited (with P/E of 48.00).

During the fiscal year that ended on March 31, 2022, and March 31, 2023, Motisons Jewellers Limited saw increases in revenue of 16.64% and profit after tax (PAT) of 50.51%, as per reports.

Also Read: Motisons Jewellers IPO announces price band at ₹52-55 per share: GMP, issue details, more

Motisons Jewellers IPO date

Tentatively, Motisons Jewellers IPO basis of allotment of shares will be finalised on Thursday, December 21 and the company will initiate refunds on Friday, December 22, while the shares will be credited to the demat account of allottees on the same day following refund. Motisons Jewellers IPO shares are likely to be listed on BSE and NSE on Tuesday, December 26. Given that T+3 listing is mandatory as of December 1, 2023, Motisons IPO will list on primary markets this month under this norm.

Also Read: Motisons Jewellers IPO: Here are 10 things to know before subscribing

Motisons Jewellers IPO GMP today

Motisons IPO GMP today or Motisons IPO grey market premium is +109, similar to the previous session. This indicates Motisons Jewellers share price were trading at a premium of ₹109 in the grey market, according to investorgain.com.

Considering the upper end of the IPO price band and the current premium in the grey market, the estimated listing price of Motisons Jewellers share price was indicated at ₹164 apiece, which is 198.18% higher than the IPO price of ₹55.

'Grey market premium' indicates investors' readiness to pay more than the issue price.

Also Read: Motisons Jewellers IPO: GMP, price, subscription status, other details. Should you apply?

Motisons Jewellers IPO Review

BP Equities Pvt. Limited

The brokerage claims that Motisons Jewellers has a number of unique advantages, such as a long history that skillfully combines tradition and contemporary sensibility, an extensive product line that appeals to a wide range of consumer niches, and well-located showrooms that boost revenue per square foot. Over the last three years, Motisons Jewellers has shown strong revenue growth, with a noteworthy doubling of net profit in the last two years. This increase in profitability is a result of the company's stronghold in Rajasthan and its strategic positioning in India's organised jewellery market. Net profit margin has been in the 4-6% range for a long time, which makes it a reliable proxy for retail consumers moving from unorganised to organised segments.

“Delving into valuations, the issue is offered a P/E multiple of 16.1x of FY23 earnings which stands favourably when compared to similar ratios in the organised jewellery sector in India. We, therefore, recommend investors to “SUBSCRIBE” for listing gains to the issue,” said the brokerage.

Swastika Investmart Ltd

Motison's growth prospects are further strengthened by its commitment to technology integration and retail network expansion, according to the brokerage's report. Nonetheless, the intense rivalry and reliance on outside vendors pose significant difficulties. In addition, bad press and seasonal variations in demand can affect the company.

“Despite these considerations, the IPO's attractive valuation of 16x P/E offers a degree of risk mitigation. Considering Motisons' strong brand, proven track record, and growth plans, alongside the current market sentiment, we recommend applying for this IPO with cautious optimism,” the brokerage said.

Disclaimer: The views and recommendations above are those of individual analysts, experts and broking companies, not of Mint. We advise investors to check with certified experts before making any investment decisions.