Manoj Vaibhav Gems ‘N’ Jewellers IPO Review: Manoj Vaibhav Gems ‘N’ Jewellers is coming up with its Initial Public Offering. The IPO will open for subscription on 22 September 2023 and close on 26 September 2023.
In this article, we will look at the Manoj Vaibhav Gems ‘N’ Jewellers IPO Review and analyze its strengths, weaknesses, financials and GMP. Keep reading to find out!
Table of Contents
Manoj Vaibhav Gems ‘N’ Jewellers IPO Review – About The Company
Manoj Vaibhav Gems ‘N’ Jewellers Limited, also known as Vaibhav Jewellers, is a South Indian regional jewellery brand incorporated in 2003. It is a leading regional jewellery brand led by a first-generation woman entrepreneur in South India.
The company sells gold, silver, and diamond jewellery, precious gemstones, and other jewellery items through retail stores and online. The company has established 13 showrooms across 8 towns and 2 cities in Andhra Pradesh & Telangana.
It caters to all economic segments of the micro markets of Andhra Pradesh and Telangana through its retail showrooms and its website with a focus on both rural and urban markets.
The company has 77% of its retail showrooms in Tier 2 and Tier 3 cities catering to the semi-urban and rural demand of Andhra Pradesh and Telangana. The remaining 15% of its retail showroom is located in the Mini Metro city of Hyderabad and 8% of its showroom is located in the Tier 1 city of Visakhapatnam catering to the urban consumers.
Manoj Vaibhav Gems ‘N’ Jewellers IPO Review – About The Industry
In FY2023, the Indian jewellery retail sector was valued at nearly $70 billion. The organized retail sector, which includes national and regional players, accounts for around 32% of the market. However, the unorganized segment, which consists of over 500,000 local goldsmiths and jewellers, still dominates the rest of the market. It is expected that the jewellery retail market will expand to approximately $124 billion by FY27.
By FY 2023, the market size for Andhra Pradesh and Telangana was $3.3 billion and $2.8 billion, respectively. The Andhra Pradesh jewellery market is expected to reach $6.3 billion by FY27, growing at a CAGR of 18%. Similarly, the Telangana market is also expected to grow to $5.3 billion during the same period at a CAGR of 18%.
In the states of Andhra Pradesh and Telangana, the rural market accounts for 50-52% of the total jewellery market in FY 2023. Within this market, 60-70% of the demand for jewellery is driven by weddings, followed by the need for investment after the harvest.
In FY 2023, the organized market contributed 39% of the overall jewellery market in the states of Andhra Pradesh and Telangana, and it is predicted to expand to 45% by FY 2027. Andhra Pradesh and Telangana’s present organized market of $2.35 billion is predicted to expand at a CAGR of 22% to $5.21 billion by FY2027.
Manoj Vaibhav Gems ‘N’ Jewellers IPO Review – Financials
If we look at the financials of Manoj Vaibhav Gems ‘N’ Jewellers we notice that their total assets have increased from ₹803.10 crores in March 2021 to ₹1,082.82 crores in June 2023.
Similarly, its revenue has also increased from ₹1,443.18 crores in March 2021 to ₹2,031.30 crores in March 2023. The net profit of the company has also tripled from ₹20.74 Crores in March 2021 to ₹71.60 with a net profit margin currently standing at 3.53%.
During the June quarters of FY24, the company reported a total revenue and a net profit of ₹510.21 crores and ₹19.24 crores respectively.
In terms of return ratios, it has a ROE of 23.19% and a RoCE of 17.71% as of FY23. These ratios indicate a good return to shareholders’ capital and an efficient use of company resources.
Summary of Financial Information
Key Players in the Market
The following image will show you the key players and their retail stores in the states of Andhra Pradesh and Telangana
Strengths of the Company
- The company has a 4% in Andhra Pradesh and Telangana jewellery market and and 10% of the organized market in these two states in FY2023.
- The company is concentrated in the micro markets of Andhra Pradesh and Telangana and is expanding its presence in these states. This helps it to capture the demand and meet the taste of the population of both states.
- The company has an early mover advantage in Andhra Pradesh. It studies the market, surroundings, and consumer preferences before opening any retail showroom. It also estimates all the parameters to ensure positive business growth in the new location.
- As Urban India accounts for approximately 42% of gold jewellery demand, the company focuses on fortifying its business through Rural Market focus.
- The company follows the Go-To-Market (GTM) model, through which it has developed strong connections and built long-lasting relationships with its customers. This ensures repeat business for the company.
Weaknesses of the Company
- The non-availability or high cost of quality gold bullion, diamonds, silver and other precious and semi-precious stones may affect the business adversely.
- The company requires a huge working capital requirement to run its operations. The inability to acquire such working capital can adversely affect the business.
- The company’s business is limited to the states of Andhra Pradesh and Telangana. This increases the company’s exposure to adverse developments related to competition, demographic changes, economic downturn, and any force majeure event in these states.
- The company operates in a highly competitive market and faces competition from other jewellery retailers both from organised as well as unorganised markets.
- The company is subject to unavailability and fluctuations in prices of raw materials that it uses for its products.
Manoj Vaibhav Gems ‘N’ Jewellers IPO Review – GMP
GMP for Manoj Vaibhav Gems IPO has not started yet.
Manoj Vaibhav Gems ‘N’ Jewellers IPO Review – Key IPO Information
| Particulars | Details |
|---|---|
| IPO Size | ₹270.20 Cr |
| Fresh Issue | ₹210.00 Cr |
| Offer for Sale (OFS) | ₹60.20 Cr |
| Opening date | September 22, 2023 |
| Closing date | September 26, 2023 |
| Face Value | ₹10 per share |
| Price Band | ₹204 to ₹215 per share |
| Lot Size | 69 Shares |
| Minimum Lot Size | 1(69 shares) |
| Maximum Lot Size | 13(897 shares) |
| Listing Date | October 6, 2023 |
Promoters: Grandhi Bharata Mallika Ratna Kumari (HUF), Bharata Mallika Ratna Kumari Grandhi, and Grandhi Sai Keerthana
Book Running Lead Manager: Bajaj Capital Limited and Elara Capital (India) Private Limited
Registrar to the Offer: Bigshare Services Pvt Ltd
The Objective of the Issue
The proceeds from the offer for sale will not be received by the company:
- To Finance the establishment of the proposed 8 new showrooms, i.e.
- (a) Capital expenditure cost for the proposed eight (8) new showrooms,
- (b) Inventory cost for the proposed eight (8) new showrooms
- General corporate purposes
In Closing
In this article, we looked at the details of Manoj Vaibhav Gems ‘N’ Jewellers. We conclude that, though the company sale is limited to 2 states, it has room to capture room to acquire more market share in these states, especially from the urban segment as the market size of the jewellery industry increases in the future
What do think the future holds for the company? Are you applying for the IPO? Let us know in the comments below.
Written By Aaron Vas
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