Two thirds of Senco Gold’s ₹405 crore IPO subscribed on day 1

• The retail book of the offer was fully subscribed, but QIBs are yet to put in any bids.
  
• The company has allocated around 50% of the offer on a proportionate basis to QIBs.
  
• The price band of the offer has been fixed at ₹301-₹317 per equity share.
  

As much as 69% of the initial public offer (IPO) of Senco Gold was subscribed on the day 1 of the issue opening on Tuesday.

While the retail book was fully subscribed, qualified institutional buyers (QIBs) are yet to put in any bids. The company opened its public issue on July 4 and it will close on July 6.

The company has allocated around 50% of the offer on a proportionate basis to 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 will be raised through the IPO, through sale of equity shares with a face value of ₹10 each.

Senco Gold IPO subscription details
Source: BSE

About the company

Senco Gold is a pan-India jewellery retailer, which sells 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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