Vaibhav Jewelers IPO: Opens on 22nd September – Key Details to Know

Vaibhav Jewelers IPO

Vaibhav Jewelers IPO: Comprehensive Overview and Investment Opportunities

The financial world is buzzing with anticipation as Vaibhav Jewelers, a well-established jewelry brand based in Andhra Pradesh, prepares to launch its Initial Public Offering (IPO) on September 22, 2023.

This IPO, which is the 11th to hit the market this September, promises exciting prospects for investors looking to enter the jewelry sector.

Investment Window

For those eager to participate in this opportunity, the investment window will remain open until September 26, 2023.

However, it’s worth noting that anchor investors will have the privilege of accessing this public issue slightly earlier, starting from September 21, 2023.

The Vaibhav Jewelers IPO will introduce fresh equity shares worth Rs 210 crore to the market. Additionally, there will be an Offer-for-Sale (OFS) component, involving the sale of 28 lakh shares by promoter Grandhi Bharat Mallika Ratna Kumari (HUF). This dual offering structure is designed to cater to a diverse range of investors, each with their unique investment strategies and preferences.

Allocation Strategy

To ensure fair distribution and participation, the IPO allocation has been strategically segmented. Here’s how it breaks down:

1. Qualified Institutional Buyers (QIBs): Half of the offer size has been reserved for QIBs. Within this category, up to 60% will be allocated to anchor investors, a testament to the appeal of Vaibhav Jewelers in the institutional investment landscape.
2. High Net Worth Individuals (HNIs): Non-institutional investors, commonly referred to as HNIs, have been allocated 15% of the issue size. This reserved allocation offers an opportunity for individuals seeking to make substantial investments in the IPO.
3. Retail Investors: The remaining 35% of the issue size is earmarked for retail investors, allowing individual investors to participate in the growth story of Vaibhav Jewelers.

Utilization of Funds

The funds generated from the fresh equity shares issued under the IPO will be channeled primarily towards expanding Vaibhav Jewelers’ retail footprint.

The company has ambitious plans to establish eight new showrooms in the fiscal years 2023-24 and 2024-25. This strategic expansion endeavor is expected to incur an estimated cost of Rs 172 crore.

Furthermore, any surplus funds resulting from the IPO will be directed towards general corporate purposes. This could include strengthening the company’s supply chain, enhancing marketing efforts, or even exploring new business avenues within the jewelry industry.

Vaibhav Jewelers: A Leading South Indian Brand

Before diving into the financial intricacies of the IPO, let’s explore what makes Vaibhav Jewelers a standout brand in South India.

The brand’s current leadership is held by Bharat Mallika Ratna Kumari Grandhi and her daughter, Grandhi Sai Kirtana. With a presence in 13 showrooms spread across eight towns and two cities in Andhra Pradesh and Telangana, Vaibhav Jewelers is a hyperlocal jewelry retail chain with deep-rooted community ties.

Robust Financial Performance

The financial performance of Vaibhav Jewelers is a testament to its resilience and strategic acumen. Between FY 2020-21 and FY 2022-23, the company achieved an impressive 18.92% Compound Annual Growth Rate (CAGR) in revenue from operations, culminating in a substantial revenue figure of Rs 2,027.34 crore in FY 2022-23. This growth trajectory underscores the brand’s enduring appeal and customer trust.

The net profit of Vaibhav Jewelers witnessed exponential growth during the same period, with a staggering CAGR of 85.81%. In FY 2022-23, the net profit reached Rs 71.6 crore, demonstrating the company’s ability to convert revenue into sustainable profitability.

Furthermore, the brand’s Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) displayed remarkable growth, registering a CAGR of 43.42%. EBITDA reached Rs 143 crore in the mentioned period, a remarkable achievement for a regional jewelry brand.

Moreover, the margin expansion during this time increased from 4.85% in FY 2020-21 to a healthy 7.06% in FY 2022-23, highlighting the brand’s commitment to operational excellence.

Timeline and Listing

For investors keen on knowing when Vaibhav Jewelers’ shares will be listed, here’s a brief timeline to keep in mind:

• By October 3, Vaibhav Jewelers plans to finalize the basis of allotment of IPO shares, in consultation with the Bombay Stock Exchange (BSE).
• Successful investors can anticipate the equity shares being credited to their demat accounts by October 5.
• For those investors who do not receive an allocation, refunds will be processed and deposited in their bank accounts by October 4.
• The much-awaited listing of Vaibhav Jewelers’ equity shares on both the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE) is scheduled for October 6. This milestone will mark the brand’s entry into the public equity markets, making it accessible to a broader base of investors.

IPO Management

The success of any IPO relies significantly on efficient management and execution. In the case of Vaibhav Jewelers, two prominent entities are spearheading the process:

• Bajaj Capital and Elara Capital (India) are serving as the merchant bankers to the issue. Their extensive experience in capital market transactions and financial expertise will play a crucial role in ensuring a smooth IPO process.
• BigShare Services has been appointed as the registrar to the offer. Their responsibilities include overseeing the allocation of shares, processing refunds, and addressing investor queries, ensuring transparency and accountability throughout the IPO journey.

Investor Considerations

For potential investors, several factors make Vaibhav Jewelers an appealing investment proposition:

1. Strong Regional Presence: Vaibhav Jewelers has firmly established itself as a leading jewelry brand in South India, with a significant presence in Andhra Pradesh and Telangana. This regional strength provides a solid foundation for future growth.
2. Financial Resilience: The company’s robust financial performance, as evidenced by its revenue growth, profitability, and EBITDA margins, demonstrates its ability to navigate the challenges of the jewelry industry effectively.
3. Expansion Plans: The allocation of funds from the IPO for showroom expansion underscores the brand’s commitment to growth and market penetration.
4. Management Expertise: The leadership team, led by Bharat Mallika Ratna Kumari Grandhi and Grandhi Sai Kirtana, brings a wealth of experience and industry knowledge to the table, instilling confidence in investors.
5. Market Potential: The jewelry industry in India is known for its enduring demand, and Vaibhav Jewelers’ strong regional foothold positions it well to capitalize on this market potential.

Final Thoughts

The Vaibhav Jewelers IPO presents a compelling opportunity for investors seeking exposure to the Indian jewelry industry. With a strong regional presence, impressive financial performance, and strategic expansion plans, Vaibhav Jewelers is poised for growth.