PN GADGIL JEWELLERS SEEKS RS 1,100-CRORE IPO TO FUEL EXPANSION

27th March 2024

PN Gadgil Jewellers, the 2^nd largest organised jewellery player in Maharashtra, has taken a significant step towards expansion by filing its draft red herring prospectus (DRHP) with the Securities and Exchange Board of India (SEBI) to raise funds through an initial public offering (IPO)

The Company’s initial public offering comprises a fresh issue of equity shares of face value of ₹ 10 each aggregating up to ₹ 8,500 million and an offer for sale of equity shares of face value of ₹ 10 each aggregating up to ₹ 2,500 million. The total offer size comprises of equity shares of face value of ₹ 10 each aggregating up to ₹ 11,000 million. The offer for sale comprises of equity shares of face value of ₹ 10 each aggregating up to ₹ 2,500 million by SVG Business Trust (Promoter Selling Shareholder).

The funds raised through the IPO are proposed to be utilized for the funding of expenditure towards setting-up of 12 new stores in Maharashtra, repayment or pre-payment, in full or part, of certain borrowings availed by the Company; and general corporate purposes.

P N Gadgil Jewellers Limited is the second largest among the prominent organised jewellery players in Maharashtra, in terms of the number of stores as on January, 2024, which is the largest market for BIS-registered outlets in India. The company is also the fastest growing jewellery brand amongst the key organised jewellery players in India, based on the revenue growth between FY21 and FY23. The company achieved an EBITDA growth of 56.50% between FY21 and FY23 as well as the highest revenue per square feet in FY23, which the highest among the key organised jewellery players in India.

As on December 31, 2023, the company expanded to 33 stores, which includes 32 stores across 18 cities in Maharashtra and Goa and one store in the U.S. with an aggregate retail area of approximately 95,885 sq. ft. All the stores are operated and managed by the company with 23 being owned stores and 10 franchisee stores, on a franchisee owned and company operated (“FOCO”) model. Of these stores, 19 stores are large format stores (with an area of 2,500 sq. ft. or more), 11 stores are medium format stores (with an area between 1,000 sq. ft. to 2,500 sq. ft.) and 3 stores are small format stores (with an area of less than 1,000 sq. ft.). Additionally, they have launched their mobile application “PNG Jewellers”, in March 2022. The digital presence allows them to keep customers updated on new designs and collections and familiarise them with the product portfolio, which enhances customers’ in-store experience. The manufacturing of all the jewellery is carried out by more than 75 experienced and skilled artisans in and outside Maharashtra (Karigars). They have currently engaged Madhuri Dixit, as the brand ambassador to promote the brand.

The ‘PNG’ brand derives its legacy from the ‘P N Gadgil’ brand, which has a rich heritage dating back to 1832 and a legacy of over a century. Leveraging the legacy and heritage of the ‘PNG’ brand, the company has created a strong brand recall and presence in Maharashtra offering a wide range of precious metal / jewellery products including gold, silver, platinum and diamond jewellery, across various price points and designs which cover the need of customers and include collections that are specifically designed for special occasions, such as weddings, engagements, anniversaries and festivals, as well as everyday wear jewellery. Promoter, Saurabh Vidyadhar Gadgil, is a sixth generation entrepreneur and has over 25 years of experience in the jewellery manufacturing industry in India. As the managing director of the Company, he has been instrumental in transforming the traditional family business into a contemporary brand.

Motilal Oswal Investment Advisors Limited, Nuvama Wealth Management Limited (formerly known as Edelweiss Securities Limited) and BOB Capital Markets Limited are the Book Running Lead Managers to the issue.