Jewellery retailer Senco Gold has filed the draft red herring prospectus (DRHP) for its initial public offering (IPO) with the capital market regulator Securities & Exchange Board of India (SEBI). The company intends to raise around Rs 525 crore through the IPO.
Senco Gold IPO comprises a fresh issue of equity shares worth Rs 325 crore and an offer for sale (OFS) of equity shares aggregating to Rs 200 crore by shareholder SAIF Partners India IV Limited.
The company is also likely to consider a pre-IPO placement of equity shares of up to Rs 65 crore. In the case of such pre-IPO placement, the fresh issue size will be reduced.
According to Senco Gold IPO draft papers, the company proposes to utilise around Rs 240 crore of the net proceeds from the fresh issue towards funding working capital requirements and the remaining amount for general corporate purposes. The proceeds of the offer for sale will go to the selling shareholders.
Other details of the Sanco Gold IPO such as the IPO price band, number of equity shares, IPO period, and lot size have not yet been announced.
As per the DRHP, the company has reserved 50% of the IPO size for qualified institutional buyers (QIB), 35% for retail individual investors (RII) and the remaining 15% has been reserved for non-institutional investors (NII).
SBI Capital Markets, IIFL Securities and Ambit have been selected as the book running lead managers (BRLM) for the Senco Gold IPO.
After the Senco Gold IPO is complete, its shares are proposed to be listed on both the exchanges, BSE and the National Stock Exchange (NSE).
Recently, the company entered into a share subscription with Oman India Joint Investment Fund Trustee Company Private Limited, the trustee of Oman India Joint Investment Fund II for the issue and subscription of 26,63,541 Equity Shares for an aggregate consideration of Rs. 75 crore.
About Senco Gold
Incorporated in August 1994, Senco Gold is a pan-India jewellery retail player with a history of more than five decades and has a fourth-generation entrepreneur in the jewellery industry as its promoter. The company is the largest organised jewellery retailer in the eastern region of India based on the number of stores and among eastern India based jewellery retailers, it has the widest geographical footprint in non-eastern states.
The company primarily sells gold and diamond jewellery and jewellery made of silver, platinum and precious and semi-precious stones and other metals. Its products are sold under the “Senco Gold & Diamonds” tradename.
Senco Gold has 127 showrooms in 89 cities and towns across 13 states in India. Out of these, 70 stores are company-operated and 57 are franchises. Some of these franchises are also located in tier-2 and tier-3 cities.
Senco Gold also has an online presence as it sells products through various online platforms. The company also undertakes wholesale exports of its products to Singapore, Dubai and Malaysia.
Senco Gold’s revenue from operations in the fiscal year ended March 2021 was at Rs 2,660 crore, registering a growth of 9.92% from Rs 2,420 crore in FY20. During the eight months ended November 2021, the company earned a revenue of Rs 2,467 crore.
The company’s consolidated net profit during FY21 was Rs 61.48 crore and during the eight months ended November 2021, the consolidated profit was Rs 101.57 crore, according to the DRHP.
Ranjana Sen is the Chairperson and the Whole-Time Director of Senco Gold. Suvankar Sen is the Managing Director and the Chief Executive Director while Joita Sen the Whole-Time Director of the company.
Vivek Kumar Mathur is the Nominee Director of the company. Bhaskar Sen, Kumar Shankar Dutta, Suman Verma and Shankar Prasad Halder are Independent Directors of the Senco Gold.
Key Internal and External Risks
In the DRHP, Senco Gold has mentioned certain internal and external risks that will impact the company’s business.
Among its internal risks, the company said that it faces significant competition in the Indian jewellery market and risks of losing substantial portion of its customers and market share which will adversely affect its business, financial condition, results of operations and prospects.
Among external risks, the company said that the general economic conditions in India and downgrading of India’s sovereign debt rating by an international rating agency could have a negative impact on its business.
How can you apply for Senco Gold IPO?
If you want to apply for Senco Gold IPO, you must first get a demat account, a trading account, a mobile number linked to the bank account and UPI ID. You can then follow the below steps to apply for the IPO:
> Login to BOX (https://box.tradesmartonline.in/login) on the TradeSmart platform
> Select the ‘IPO’ option under the portfolio menu
> Click on BID under the list of Current & Upcoming IPO’s section
> Enter your UPI ID
-Please make sure the UPI ID is mapped to your personal bank account
-The IPO application is liable to get rejected if the person who is applying is different from the one whose bank account is used to apply. Third person bank accounts are not accepted.
> Place your bid(s). Please note the below points.
-While placing the bids, only quantity that is a multiple of the lot size is allowed.
-If you wish to apply at the cut-off price, simply click on the checkbox next to ‘Cutoff-price’. If you want to place a bid at a different price, you can do so by entering a price in the ‘Price’ field.
-Once you’ve completed all these steps, click on the checkbox to confirm that you have read the RHP and other documents.
-Click on Continue
>Accept mandate request on your UPI App
> At the end of the day after submitting the IPO bid, you will receive an SMS from the exchange confirming your application. You may also check the status of your bid in My Applications (https://box.tradesmartonline.in/login) tab.
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