RBZ Jewelers' stock market debut is probably going to be less than stellar

RBZ Jewelers' stock market debut is probably going to be less than stellar

RBZ Jewelers' stock market debut is probably going to be less than stellar

A gold jewelry maker that specializes in making antique designs is called RBZ Jewelers. Reputable national, regional, and local family jewelers from 19 states and 72 cities in India make up the company's wholesale clientele.

The most recent issuance of one crore equity shares was the company's Rs 100 crore public sale.

On December 26, Ahmedabad-based RBZ Jewelers is scheduled to launch on the stock exchange. However, given that the stock is trading at a premium of Rs 5, gray market tendencies point to moderate listing gains for the business. This suggests a mere five percent gain. when the item was listed.

Investor interest in the company's first public offering (IPO) was strong, as seen by the 16.86 times subscribed issue. High net worth people purchased 9.27 times more than the allocated percentage, whilst retail investors showed the strongest interest, purchasing 24.74 times more than their allotment. 13.43 times the reserved shares were chosen by qualified institutional purchasers.

"We anticipate that the RBZ Jewelers issue will list well. We anticipate that the IPO would begin trading at a premium of around 5% above the Rs 100 issue price, according to Stockbox research analyst Prathamesh Masdekar.

Masdekar emphasized that the company's wholesale clientele consists of reputable family jewelers from 20 states and 72 cities in India as well as national, regional, and local businesses. He finds the company's business strategy, which has total control over the whole value chain, to be a unique offering.

Masdekar further suggests that investors who have received allocations keep onto their shares with a medium- to long-term outlook.

But the company's governance problems are brought to light by worries about its recent lack of information sharing with credit rating agencies like Brickwork and CRISIL. These worries could have also had an impact on the company's demand on the gray market.

Due to robust operational performance, the firm recorded a 55% year-over-year increase in net profit for FY23, coming in at Rs 22.33 crore.

EBITDA increased by 41% to Rs 37.8 crore during the same period, while revenue increased by 14.2% to Rs 288 crore from the previous fiscal year. During the same quarter, operating margin increased by 249 basis points (bps) on an annual basis to 13.11 percent.

On sales of Rs 125.5 crore, its net profit for the first half of FY24 ended in September was Rs 12.09 crore.

According to Anand Rathi Shares and Stock Brokers' Head of Fundamental Research, Narendra Solanki, the firm is properly priced at a P/E of 17.9X with a market cap of Rs 400, near the top half of the price range of Rs 95-100. Crore published his listing.

But in the midst of such worries, Solanki also advised investors to keep business stock, provided that it was allocated in accordance with their risk tolerance.

The jewelry manufacturer intends to utilize the additional funds primarily to cover its Rs 80.75 crore working capital needs. Not more than 25% of the gross profits will be retained for general company purposes with the remaining funds.