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PC Jeweller Plans IPO for Retail Expansion

Oct 4, 2011 3:15 AM   By Dilipp S Nag
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RAPAPORT...  PC Jeweller Ltd. is aiming to raise more than $116.3 million (INR 5.7 billion) through an initial public offering (IPO) of equity shares to fund its planned retail expansion across India.

The company, which has 20 stores in north and central India operating under the ''PC Jeweller'' brand, intends to establish 20 new stores in fiscal 2013 and 2014, including in southern and western parts of India where it currently does not have a presence. The company plans to open 10 showrooms in fiscal 2012, including in Ajmer, Amritsar, Beawar and New Delhi.

Funds raised will also be used to cover capital expenditure, including costs relating to showroom design and interiors and the cost of finished products to be stocked in such stores.

PC Jeweller filed its draft prospectus with the capital market regulator Securities and Exchange Board of India (Sebi) on Monday stating that it will offer 45.1 million equity share of INR 10 each through the IPO. It has reserved 358,500 equity shares for employees while 44.8 million shares are being offered to the public. The promoters, Padam Chand Gupta and Balram Garg, which currently hold a 93.61 percent stake in the company, are looking at divesting 25.20 percent to investors.

PC Jeweller’s products include gold, diamond and other jewelry, including silver articles, with a focus on bridal lines. The company’s primary competitors in domestic retail business include Tanishq, Tribhovandas Bhimji Zaveri, Gitanjali Gems and Joyalukkas.

The company also sells gold and diamond jewelry on a wholesale basis both locally and to international distributors in Dubai, Hong Kong and Singapore.

During fiscal 2011, the company posted a net profit of $29.9 million (INR1.47 billion) on revenues of $406.9 million (INR 19.94 billion). Exports contributed 34 percent of revenues during the year.

PC Jeweller reported that it currently has two jewelry manufacturing facilities in Uttarakhand that cater to the local market and two at the Noida SEZ for the overseas market. The company is in the process of commissioning an additional 34,000-square-feet of jewelry manufacturing space in Noida to further enhance its manufacturing capabilities and is exploring the feasibility of setting up a diamond cutting and polishing facility in Surat. In addition, it is exploring the possibility of setting up international retail operations.

The book running lead managers to the issue are SBI Capital Markets and Kotak Mahindra Capital Company and the co-book running lead manager is IDBI Capital Market Services.

PC Jeweller has proposed to list its equity shares on the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE).

 

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Tags: Balram Garg, diamonds, Dilipp S Nag, gold, India, ipo, Jewelky, jewellery, Jewelry, PC Jeweller, retail, Sebi
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