PNGS Gargi Fashion jewellery is engaged in the retail business of costume and fashion jewellery under the brand name 'Gargi by P. N. Gadgil & Sons' launched in 2021 under the artificial jewellery segment. They deal in 92.5% certified sterling silver jewellery and brass jewellery, idols and other silverware and related gift items. Company offers a wide range of products from costume and fashion jewellery segment for special occasions such as weddings and festivals to daily-wear jewellery for all ages, genders and across various price points. The product line includes earrings, necklaces, pendants, chains, finger rings, bracelets, anklets, nose pins, mangal sutra, pendant set, bangles in brass or silver for females of age groups as well as male accessories such as rings, cufflinks, button set, that cater to customers taste, preference, choice and the ever-changing trends in the chain and jewellery designs. Their portfolio offers the customers a wide variety of traditional, Indo-western, & modern design and jewellery. Company primarily sources finished jewellery from third party manufacturing vendors located across India. This includes all types of jewellery primarily made of silver and brass. Additionally, they also outsource the work of making costume jewellery to various artisans. These products are mainly marketed using both online as well as offline marketing tools. The company operates through shop in shop model and they have entered into an agreement with P.N. Gadgil & Sons Limited and P. N. Gadgil Art & Culture Foundation to have point of sales (POS) counters at its existing 30 showrooms across the states of Maharashtra, Gujarat and Karnataka. They also sell their products through the online platform at www.gargi.shop, which was launched in the year 2022. As on October 31, 2022, they have around 23 employees on payroll, to look after the day-to-day business operations, administrative, secretarial, legal and accounting functions in accordance with their respective designated duties. As per financial performance, PNGS Gargi Fashion Jewellery Limited has posted total income/net profits of Rs 0.00 Cr / Rs (0.001) Cr (FY20), Rs 0.006 Cr / Rs 0.004 Cr (FY21), Rs 5.94 Cr / Rs 1.10 Cr (FY22) and Rs 11.89 Cr / Rs 2.13 Cr (upto 6M FY23). So company has shown exceptional growth in last 18 months, but very limited financial data is available. Company has posted an average EPS of Rs 197.73 and average RoNW of 56.28% for last three fiscals. Issue is priced at a P/B of 2.39 as per NAV of Rs 12.54 post issue. As per FY22 earnings on fully diluted equity post issue, asking price is at P/E of around 26.17 and as per annualised FY23 earnings P/E is 6.79. As per RHP, there is no listed peer. On BRLM's front, Sherni Private Limited associated with this SME IPO and handled 15 SME IPOs in last 3 years. From last 10 IPO all opened above issue price or at par. As of now from last 10 IPOs, four are trading below and remaining are trading above issue price or at par. ( As on 05.12.22 ) As per financials PNGS Gargi Fashion Jewellery Limited, has shown good results, RoNW is 100.94% and P/E is respectively 26.17 and 6.79 as per FY22 and annualised FY23 earnings, which looks fairly priced, but company is in business of Silver and Artificial Jewellery, that is highly competitive and fragmented segment, so its doubtful if company can manage same margins in future and also company is very new. Performance of BRLM is average post listing. So we are giving "SUBSCRIBE WITH CAUTION" rating to this IPO and one should book profit post listing.
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