Motisons Jewellers IPO Review: With wedding season approaching and people shopping for Jewellery, there’s an opportunity to invest in Jewellery. Motisons Jewellers, which specializes in traditional Jewellery manufacturing, is launching its initial public offering during this season. 
The IPO will open for subscription on December 18, 2023 and close on December 20, 2023. In this article, we will look at the Motisons Jewellers IPO Review and analyse its strengths, weaknesses, financials and GMP. Keep reading to find out!

Motisons Jewellers IPO Review

About The Company

Incorporated in October 1997, Motisons Jewellers Limited is engaged in the business of selling jewellery including gold, diamond, Kundan, pearl, silver, platinum, and other metals. 

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The company offers a wide range of products, including traditional, contemporary, and combination designs across various jewellery lines. These products cater to special occasions like weddings and festivals and daily wear jewellery for all ages and genders and across different price ranges.

The company now operates four showrooms in Jaipur, Rajasthan, all under the “Motisons” brand. The flagship store, ‘Motisons Tower,’ situated on Tonk Road, spans 16,002.06 sq ft across three floors, dedicated to silver, gold, and diamond jewellery. The latest store, established in 2021, is located in the upscale neighborhood of Vaishali Nagar in southwestern Jaipur, Rajasthan.

In addition to selling products at its showrooms, the company also sell its products through its online platform. Furthermore, it arranges virtual appointments to assist its customers. 

About The Industry

The Indian gems and Jewellery sector is a significant contributor to India’s economy. According to the Dun and Bradstreet Report, it accounts for 7% of the country’s Gross Domestic Product. 

The sector employs over 5 million skilled and semi-skilled workers and contributes around 10-12% to India’s total merchandise exports, making it the third-largest commodity share in the country. In FY 2023, the domestic gems and jewellery market was valued at approximately Rs 4,700 billion, with gold jewellery being the leading segment.

Motisons Jewellers IPO – Financials

If we look at the financials of Motisons Jewellers we notice that their total assets have increased from ₹275.42 crores in March 2021 to ₹348.13 crores in June 2023.

Similarly, its revenue has also increased from ₹213.06 crores in March 2021 to ₹366.81 crores in March 2023. The net profit of the company has increased from ₹9.67 Crores in March 2021 to ₹22.20 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 ₹86.76 crores and ₹5.48 crores respectively.

In terms of return ratios, it has a ROE of 17.56% and a RoCE of 30.04% as of FY23. These ratios indicate a good return to shareholders’ capital and an efficient use of company resources.

The company has a debt-to-equity ratio of the company stood at 1.20. This suggests that the company is slightly leveraged

Key Players in the Market

The following image will show you the  comparison of Motisons Jewellers with its listed peers in the market:

Motisons Jewellers Financials Data
(Source: RHP of the company)

Strengths of the Company

  • The company has strategically expanded its retail network in Rajasthan, which is known for manufacturing traditional jewellery. This will help them tap into the growing historical jewellery retail market.
  • The company has a product portfolio of 3,00,000+ jewellery designs, including a wide range of gold, diamond and other jewellery products available at different price points.
  • The company has established effective systems for inventory management, emphasizing quality control, safety, security, and surveillance. In addition, strategic procurement of raw materials aims to prevent adverse effects on financial conditions and operations. 
  • The company has capitalized on the promoter’s industry experience to establish a reputable jewellery brand in India, with a broad customer base. Additionally, it is also supported board of directors contributing diverse expertise to shape strategic initiatives.

Weaknesses of the Company

  • The company is heavily dependent on third parties to supply its products. The inability to maintain agreements with such parties and any disruption from such suppliers can adversely affect the business.
  • The company requires intensive working capital to run its operations. The inability to borrow such capital at reasonable terms can have an adverse effect on the business.
  • The company faces tough competition from organized and local players which leads to price competitions
  • If the company fails to utilise its manufacturing units to the full extent, it could have an impact on its costs, profitability, and ability to absorb fixed costs.
  • The company has a high inventory cost due to the nature of the business.

Motisons Jewellers IPO Review – GMP

The shares of Motisons Jewellers Limited traded at a premium of 109.09% in the grey market on December 12th, 2023. The shares tarded at Rs 115. This gives it a premium of Rs 60 per share over the cap price of Rs 55.

Key IPO Information

IPO Size₹151.09 Cr
Fresh Issue₹151.09 Cr
Offer for Sale (OFS)Nil
Opening dateDecember 18, 2023
Closing dateDecember 20, 2023
Face Value₹10 per share
Price Band₹52 to ₹55 per share
Lot Size250 Shares
Minimum Lot Size1
Maximum Lot Size14 (3500)
Listing DateDecember 26, 2023

Promoters: Mr. Sandeep Chhabra, Mr. Sanjay Chhabra, Ms. Namita Chhabra, Ms. Kajal Chhabra, Moti Lal Sandeep Chhabra HUF, Sandeep Chhabra HUF and Sanjay Chhabra HUF

Book Running Lead Manager: Holani Consultants Private Limited

Registrar to the Offer: Link Intime India Private Limited

The Objective of the Issue

The proceeds from the IPO will utilised for the following purposes:

  • Repayment of the existing borrowings of the company from scheduled commercial banks.
  • Funding the company’s working capital requirements
  • General corporate purposes

In Closing

In this article, we looked at the details of Motisons Jewellers IPO Review. We conclude that, while the company’s sales are currently limited to Rajasthan, its expertise in manufacturing traditional jewellery and strategic expansion in the historical jewellery retail market, combined with its diverse product range, could be interesting aspects that set the company apart from its competitors.

What do you 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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