PN Gadgil Jewellers Ltd, a prominent jewelry retail chain based in Maharashtra, has successfully raised Rs 330 crore from anchor investors ahead of its Rs 1,100-crore initial public offering (IPO). Key institutional investors, including ICICI Prudential Life Insurance and Tata Mutual Fund, were part of this pre-IPO fundraising. The company has set a price band of Rs 456 to Rs 480 per share for the IPO, which opens on September 10. The IPO comprises a fresh issue of Rs 850 crore and an offer for sale worth Rs 250 crore by SVG Business Trust. Funds raised will be used to expand stores, repay debt, and meet general corporate expenses.

Anchor Investors Support Pre-IPO Fundraising

Rs 330 crore raised from prominent institutional investors
Ahead of its IPO, PN Gadgil Jewellers Ltd has secured Rs 330 crore from notable anchor investors. These investors include prominent financial institutions such as ICICI Prudential Life Insurance, Tata Mutual Fund, and Axis Mutual Fund, among others. The company allocated a total of 68.75 lakh equity shares at Rs 480 per share, which is the upper range of the price band.

IPO Details and Subscription Window

IPO opens on September 10 with a Rs 1,100-crore target
PN Gadgil Jewellers Ltd’s Rs 1,100-crore IPO will open for public subscription on September 10 and close on September 12. The company has set a price band of Rs 456 to Rs 480 per share. This IPO consists of a fresh issue of Rs 850 crore and an offer for sale worth Rs 250 crore by its promoter, SVG Business Trust, which currently holds a 99.9% stake in the company.

Strategic Allocation of IPO Proceeds

Funds earmarked for store expansion and debt repayment
Of the Rs 850 crore raised from the fresh issue, Rs 393 crore will be allocated towards opening 12 new retail stores across Maharashtra, enhancing PN Gadgil’s footprint. Additionally, Rs 300 crore will be used to repay existing debt, which stood at Rs 397 crore as of March 2024, according to the red herring prospectus (RHP). A portion of the remaining funds will be utilized for general corporate purposes.

Market Capitalization and Broker Projections

Post-issue market valuation expected to exceed Rs 6,500 crore
Brokerage firms project PN Gadgil Jewellers’ market capitalization to surpass Rs 6,500 crore following the IPO. The company’s extensive retail and online presence, combined with its diverse jewelry product range, positions it strongly within the competitive Indian jewelry market. The firm’s product lineup includes gold, silver, platinum, and diamond jewelry, which are sold under its flagship 'PNG' brand and various sub-brands.

Growth and Expansion Strategy

Retail network to expand through IPO proceeds
As of July 2024, PN Gadgil Jewellers operated 39 retail stores and offered its products through multiple online platforms. The company’s growth strategy involves expanding its retail footprint, particularly in Maharashtra, through the establishment of 12 new stores funded by the fresh issue proceeds. The expansion is aimed at further strengthening its market position and increasing its customer base.

Lead Managers and Issue Underwriters

Motilal Oswal, Nuvama Wealth, and BOB Capital lead the issue
Motilal Oswal Investment Advisors Ltd, Nuvama Wealth Management Ltd, and BOB Capital Markets Ltd are the book-running lead managers for the PN Gadgil Jewellers IPO. These institutions will manage the subscription process and assist in raising capital for the company’s planned expansion and debt repayment strategy.

This comprehensive approach ensures PN Gadgil Jewellers is poised for significant growth, while also addressing its existing debt obligations and corporate goals. The IPO represents a pivotal moment for the company as it seeks to capitalize on its strong brand presence in the Indian jewelry market.