Shares of Kolkata-based jewellery retailer Senco Gold made a stellar debut on Dalal Street on Friday, July 14, as they listed at Rs 430 on the National Stock Exchange (NSE), a premium of 35.6 percent over the issue price of Rs 317. Senco Gold shares got listed at Rs 431 on the Bombay Stock Exchange (BSE), up 36 percent, as against the offer price.

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Ahead of the listing, the shares of Senco Gold were commanding a premium of around Rs 103 in the grey market. The robust premium in the official market suggested a stellar listing pop for the investors.

The Rs 405-crore IPO of Senco Gold was overall subscribed 77.25 times. The issue of the Kolkata-based company was open for subscription between July 4 and July 6 in the price band of Rs 301-317 per share.

The quota reserved for qualified institutional bidders (QIBs) was subscribed a whopping 190.56 times, while the portion for non-institutional bidders (NIIs) was booked 68.44 times. The allocation of retail investors was subscribed 16.28 times during the three-day bidding process.

Subscription Details

QIB 90.8X

HNI 30X

Retail 8.9X

What should investors do?

"Senco Gold IPO made a strong debut on the stock exchanges today, listing at Rs 430 per share, a premium of 36 percent over the upper end of the price band of Rs 317. The strong listing was in line with the expectations. Senco Gold is a pan-India jewelry retailer with a strong brand presence. The company has been growing steadily in recent years and is well-positioned to benefit from the growing demand for gold jewelry in India," said Anubhuti Mishra, Equity Research Analyst at Swastika Investmart.

Mishra did not recommend any fresh buying at this level, but said that existing investors can hold the shares for the long term with a stop loss at Rs 387, as the company has good growth prospects.

Manish Chowdhury, head of research at StoxBox expected the share price to list around Rs 450, which is a premium of 42 percent over the issue price of Rs 317 per share.

"We see few risks in highly competitive sector, fragmented and regulated businesses. Hence considering historic industry trends and economic rationales in the segment of Gold and Diamond Jewellery business, we recommend allotted investors to book profits if we get listing gains over and above 40 percent," said Prashanth Tapse of Mehta Equities.

Ahead of the IPO, Senco raised Rs 121 crore in the anchor round, which saw the participation of marquee investors, including Nippon MF, White Oak, Jupiter asset management, Bandhan MF, and 3P India Equity Fund, among others. 3P India Equity Fund is owned by Prashant Jain.

The public offer is a combination of fresh issues and the offer for sale (OFS) portion. The fresh equity issue is Rs 270 crore, and the OFS segment aggregates up to Rs 135 crore. Of the fresh issue net proceeds, Rs 196 crore will be utilised for funding working capital and residual for other general corporate purposes.

The net proceeds from IPO will be used for funding the firm's working capital requirements and other general corporate purposes.

IIFL Securities, Ambit, and SBI Capital Markets are book-running lead managers to the issue, while KFin Technologies is the registrar.

First Published:Jul 14, 2023 10:02 AM IST