Apply for PN Gadgil Jewellers IPO, expect good listing gain, says Anil Singhvi; here is how market guru views Maharashtra-based jewellery maker

PN Gadgil Jewellers' initial public offering (IPO), worth an estimated Rs 1,100 crore, hit Dalal Street on Tuesday, September 10. At the end of the first day of the bidding process, the IPO received bids for 3.39 crore shares, translating to an overall subscription of 2.0 times the equity on offer, according to provisional exchange data. While the portions reserved for qualified institutional buyers (QIBs) and non-institutional investors (NIIs) saw subscriptions of 1 per cent and 3.3 times, respectively, the quota meant for retail investors attracted bids of 2.6 times the equity reserves, according to the data.   

Thinking of applying for the PN Gadgil Jewellers IPO? Here's what experts say

Zee Business Managing Editor Anil Singhvi suggests subscribing to the issue for a "good listing gain and for the long term".

The market wizard has identified the following key points about the secondary market-bound jewellery manufacturer: 

Positive

• Strong promoters background
• Strong presence in Maharashtra
• Strong financial track record
• Valuations reasonable 

Negative 

• Heavy focus on Maharashtra 
• Require significant capital for expansion

How SBI Securities analysts rate the PN Gadgil IPO

Brokerage SBI Securities has assigned a 'subscribe' rating to the IPO "for a long-term investment horizon". 

Analysts at the brokerage value the IPO at a price-to-earnings multiple of 42.2 times the FY24 numbers at the upper end of the price band. 

"The company is amongst the fastest growing organised jewellers in Maharashtra and operates under the legacy of the ‘P N Gadgil’ brand. Between FY22-FY24, the company’s Revenue/EBITDA/PAT grew at a CAGR of 54.6 per cent/55.5 per cent/49.0 per cent... PNGJL is expected to save Rs ~31 cr from finance cost post repayment of debt from the proceeds of the issue and is planning to utilize Rs 393 cr to open 12 new stores in FY25 and FY26," wrote analysts at SBI Securities in a research report dated September 9.

The company is also set to capitalise on the growth trend in the jewellery market," they added. 

Key things to know about the PN Gadgil IPO

• Important dates: The IPO, which opened for subscription on Tuesday, will be available for subscription for three trading days till September 12. The basis of allotment will be finalised tentatively on September 13. The PN Gadgil Jewellers stock is set to list on bourses BSE and NSE tentatively on September 17. 
• Issue price: Under the IPO, potential investors will be able to bid for PN Gadgil Jewellers shares in the price band of Rs 456-480 per unit. 
• Lot size: Bids will be allowed in multiples of 31 shares, which translates to Rs 14,136-14,880 per lot. 
• IPO size: While the fresh issuance is estimated to be worth Rs 850 crore, the OFS is estimated to be worth Rs 250 crore. 
• Company profile: Maharashtra-headquartered PN Gadgil is a known jewellery manufacturer.

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