Senco Gold’s public issue subscribed 2.6X on day 2

• The retail book of the offer was fully subscribed by 3.67 times, with similar interest from non-institutional investors.
  
• The QIB book is yet to be fully subscribed – the company has allocated around 50% of the offer to them.
  
• The issue closes on July 6.
  

The initial public offer (IPO) of Senco Gold was subscribed 2.68 times over the shares on offer on Wednesday, the second day of the issue.

As of 5 pm, the non-institutional investor book was subscribed 3.58 times, while the retail book was subscribed 3.67 times. The issue will close on July 6.

Only 27% of the qualified institutional investor portion was subscribed as of day 2. The company has allocated around 50% of the offer to qualified institutional buyers (QIBs).

It allocated 15% to non-institutional bidders, and 35% is available to retail investors.

The price band of the offer has been fixed at ₹301-₹317 per equity share. It expects to raise as much as ₹405 crore through the IPO, through sale of equity shares with a face value of ₹10 each.

PHK Ventures withdrew its IPO on Wednesday after only 65% of its offer was subscribed on the last day.

Senco Gold IPO subscription details

Source: BSE

‘Well placed to benefit from the expected growth rate in the industry’

Senco Gold is a pan-India jewellery retailer, selling jewellery made of gold, diamond, silver, platinum and more. It has 136 showrooms in 96 cities and towns across 13 states in India.

Some of its franchisee showrooms are located in Tier-I towns that provide it greater reach in Tier-II locations, the company says in its red herring prospectus.

An IPO note by SMIFS claims that the IPO is attractively priced, commanding a price to earnings multiple of 13.9x at its upper price band – lower than its peer average.

“Senco is well placed to benefit from the expected growth rate in the industry, and the structural shift from unorganised to organised sector. Company has demonstrated one of the best financial performances among peers,” said SMIFS, giving it a ‘Subscribe’ rating for listing gains.

The company said in its RHP that it’s a very competitive business, and it risks losing a substantial market share. Volatility in the market price of gold and diamonds can affect its income, profitability and scale of operations, it added.

The company has undertaken six criminal proceedings, while it has one such proceeding against itself. There are also 44 tax proceedings against the company. Its promoters have one criminal proceeding against them and four tax proceedings.

“We have been subject to a ‘search and seizure’ operation by the income tax department in the past, which has resulted in taxation and criminal proceedings being initiated against our company and our individual promoter,” the company said in its RHP.

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