Prices of precious metals have been making rapid swings this year, which has taken a toll on the jewellery industry. Amid the volatility, PNGS Reva Diamond Jewellery has opened its IPO worth Rs 380 crore today.
The IPO is completely a fresh issue of 98 lakh shares, with the jewellery maker aiming to expand its presence across the country through the raised capital.
Currently, the company’s shares are trading at a premium of over 2% in the unlisted markets, while the offer has seen steady subscription in the QIB segment.
Here are some key details you must know about PNGS Reva Diamond’s issue:
1. PNGS Reva Diamond Jewellery IPO: Price band and Registrar
The jewellery maker’s IPO is entirely a fresh issue of 98 lakh shares aggregating to Rs 380 crore. The price band for the IPO has been fixed at Rs 367- 386 per share.
The IPO is being handled by Smart Horizon Capital Advisors, while Bigshare Services Private Limited is the registrar to the offer.
2.PNGS Reva Diamond Jewellery IPO: Subscription timeline
The issue, which opened today, will remain open for bidding for three days and close on Thursday, February 26. Share allotment is expected to be completed by February 27, and the shares would be credited to the demat accounts of shareholders by March 2, with the refund process taking place on the same day.
The company is expected to list on the bourses on March 4.
3. PNGS Reva Diamond Jewellery IPO: Employee segment oversubscribed
As of 1:58 pm (IST), the IPO was subscribed 0.38 times, receiving 21.89 lakh bids against a total of 57 lakh shares on offer. The employee reserved segment leads the pack, having been oversubscribed 2.84 times.
This is followed by the QIB segment, which has been subscribed 0.58 times.
The retail investor category has been subscribed 0.27 times, while the NII category has been subscribed 0.05 times.
4. PNGS Reva Diamond Jewellery IPO: GMP
The jewellery maker’s shares are currently trading in the unlisted markets at Rs 392, implying a premium of Rs 6, or 1.55% at the upper end of the price band. Pre-launch the shares were trading at a slightly higher premium of 2.33%, i.e., Rs 9, in the unlisted markets.
However, it is important to note that GMP is an unofficial indicator of the listing price and can fluctuate depending on market mood and conditions.
5. PNGS Reva Diamond Jewellery IPO: Lot size
Retail investors can bid for a minimum of one lot comprising 32 shares, aggregating to a minimum investment of Rs 12,352 at the upper end of the price band. The lot size for small NIIs has been fixed at 17 lots, i.e., 544 shares, and for big NIIs the lot size is 81 lots, which translates to 2,592 shares.
6. PNGS Reva Diamond Jewellery IPO: Utilisation of capital
Of the total raised capital of Rs 380 crore, the jewellery maker will utilise around Rs 286 crore towards funding the expenditure of its new stores. As per the company’s RHP, it aims to set up 15 new stores across India.
PNGS Reva added that over Rs 35 crore will be allocated towards funding the marketing and promotional expenses related to these new stores, along with enhancing brand awareness.
The remaining proceeds will be utilised towards general corporate purposes.
7. PNGS Reva Diamond Jewellery IPO: Key Risks
The company has derived over 95% of its revenue from operations from its Maharashtra stores over the past three years, which makes it heavily vulnerable to the risk of revenue concentration.
The company is vulnerable to price fluctuations in the precious metals markets, along with statutory and regulatory risks. Heavy reliance on its brand ‘Reva’ and its corporate promoter also poses the risk of reputational damage.
Customer preference for lab-grown diamonds, competition from other jewellery makers, risks pertaining to inventory levels, related party transactions, and the company’s business model centred around physical retail stores are some other key risks to monitor.