InvestorQ : Can you tell me about the IPO of Vaibhav Jewellers?
Niti Shenoi made post

Can you tell me about the IPO of Vaibhav Jewellers?

ishika Banerjee answered.
4 weeks ago

The latest company to file the draft red herring prospectus (DRHP) with SEBI is the Vizag, Andhra Pradesh based Vaibhav Gems 'N' Jewellers Ltd (Vaibhav Jewellers). This company is in no way linked to Vaibhav Gems of Mumbai. Vaibhav Jewellers is a predominantly South India based player with strong presence in the states of Telangana and Andhra Pradesh. Its IPO will entail the issue of fresh issue of Rs210 crore and an offer-for-sale of up to 43 lakh shares. The size of IPO will be known only after the price band is determined.

The offer for sale (OFS) will be executed by its existing promoter Grandhi Bharata Mallika Ratna Kumari (HUF), holding 75.1% stake in Vaibhav Jewellers. The fresh issue proceeds will be used to bankroll the setting up of 8 showrooms across South India. Overall, nearly Rs12 crore will be used for capex for the 8 retail outlets and another Rs160 crore will be used for inventory creation. It already has 13 showrooms spread across 8 towns and 2 cities for its hyperlocal jewellery sales model. In these states it corners 14% of the organized market.

Vaibhav Jewellers already has showroom space under management of 95,892 SFT. In next 2 years, the focus will be predominantly on opening showrooms in Tier-2 and Tier-3 cities. It is a profitable company with FY22 net profits of Rs20.74 crore on revenues of Rs1,694 crore. The company has seen its EBITDA margin grow from 4.85% to 6.20% on a yoy basis. Total outstanding debt stands at Rs458.53 crore, which is about one-fourth of annual sales. The issue will be lead managed by Bajaj Capital and Elara Capital.