Senco Gold Limited is a pan-India jewellery retail player with a history of more than five decades. They are the largest organised jewellery retail player in the eastern region of Bharat based on number of stores and among eastern Bharat based jewellery retailers. They primarily sell gold and diamond jewellery and also sell jewellery made of silver, platinum and precious and semi-precious stones and other metals. Their other offerings also include costume jewellery, gold and silver coins and utensils made of silver. Their products are sold under the 'Senco Gold & Diamonds' trade-name, through multiple channels, including the 75 Company Operated Showrooms and 61 Franchisee Showrooms (as on March 31, 2023) (including four franchisee owned and Company operated Showrooms) and various online platforms, including the website www.sencogoldanddiamonds.com. They continue to expand geographic presence and work towards an omni channel network. With a catalogue offering more than 1,20,000 designs for gold jewellery and more than 69,000 designs for diamond jewellery, they offer a large variety of designs of handcrafted jewellery, most of which are designed and manufactured in-house. Machine made light weight jewellery in gold and diamonds are also manufactured at the manufacturing facility based on designs prepared by the in-house designers and also sourced from third partner manufacturing vendors. As on March 31, 2023, Company has 136 showrooms, which have a total area of approximately 4,09,882 sq. ft., in 96 cities and towns over 13 states across Bharat. Some of the Franchisee Showrooms are located in areas other than metros and tier-I, providing them greater reach in tier-II locations. Further, they consistently work towards providing an omni channel experience both in-showroom as well as through the websites www.sencogoldanddiamonds.com, www.mygossip.in, www.everlite.in, www.mydigigold.com and www.mysenco.in and My Senco App. They also have marketing arrangements with leading online marketplaces. As on the date of this Red Herring Prospectus, they have a manufacturing facility located at the Gems and Jewellery Park, Ankurhati in Howrah, West Bengal. They undertake wholesale exports of the jewellery primarily to Dubai, Malaysia and Singapore. As at March 31, 2023, they had 2,138 employees. In addition, they have outsourced security personnel and housekeeping staff. As per financial performance, Senco Gold Limited has posted total income / net profits of Rs 2,674.92 Cr / Rs 61.48 Cr (FY21) and Rs 3,547.41 Cr / Rs 129.10 (FY22) and Rs 4,108.54 Cr / Rs 158.48 Cr (FY23). So as per previous financials data, company has shown average growth. Company has an average EPS of Rs 19.07 and average RoNW of 17.73% for last three fiscals. Issue is priced at a P/BV of 2.32 as per NAV of 136.83 as on 31.03.2023. If we attribute latest earnings of FY22 on fully diluted equity post issue, then asking price is at a P/E of around 19.07 and as per FY23 earnings P/E is around 15.53, which looks fairly priced. As per RHP, peers comparison is shown in above table. On BRLM's front, three lead managers are associated with this IPO, and have handled around 48 IPOs in last three fiscals.IIFL Securities Limited : This is 32nd IPO from this BRLM. From last 10 IPOs, 1 opened below issue price and remaining opened above issue price or at par on the day of listing. As of now, from last 10 IPOs, 2 are trading below issue price and remaining are trading above issue price or at par. (As on 29.06.2023) Ambit Private Limited : This is 5th IPO from this BRLM. From last 4 IPOs, 1 opened below issue price and remaining opened above issue price or at par on the day of listing. As of now, from last 4 IPOs, 2 are trading below issue price and remaining are trading above issue price or at par. (As on 29.06.2023) Sbi Capital Markets Limited : This is 14th IPO from this BRLM. From last 10 IPOs, 4 opened below issue price and remaining opened above issue price or at par on the day of listing. As of now, from last 10 IPOs, 8 are trading below issue price and remaining are trading above issue price or at par. (As on 29.06.2023) As per financials, Senco Gold Limited has shown average growth, RoNW is 18.96% and P/E is respectively 19.07 and 15.53 as per FY22 and FY23 earnings, which looks fairly priced. Company is in business of retail jewellery, which is highly fragmented and competitive. So, we give SUBSCRIBE rating for this IPO. Readers must consult a qualified financial advisor prior to making any actual investment decisions.
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