Pune-based retail jewellery chain PN Gadgil & Sons Ltd has filed a draft proposal with Securities and Exchange Board of India (SEBI) to float an initial public offering (IPO).
The offering is entirely a fresh issue of shares worth Rs 500 crore (around $75 million), as per the draft red herring prospectus.
YES Securities (India) and HDFC Bank are the merchant bankers managing the IPO of PN Gadgil, also known by its brand name PNG Jewellers.
PNG is the oldest and largest retail jewellery chain in Maharashtra by store count, and fourth-largest jewellery company in India by revenue, according to its DRHP.
PC Jeweller Ltd was the most recent branded jewellery firm to go public in December 2012 with a Rs 609-crore IPO. The Delhi-based jeweller commands a market value of nearly Rs 6,900 crore.
Luxury goods maker Titan Ltd, which houses the Tanishq brand among other jewellery subsidiaries, has a consolidated market capitalisation of Rs 85,100 crore.
A couple of other jewellery firms are also looking to go public.
VCCircle reported that US private equity firm Warburg Pincus-backed Kalyan Jewellers India Pvt. Ltd, India’s biggest branded jewellery retail chain, had shortlisted merchant bankers to float an IPO estimated worth Rs 3,000 crore later this year.
VCCircle also reported that Kolkata-based jewellery retailer Senco Gold Ltd had shortlisted merchant banks to float an IPO with an estimated size of Rs 800 crore.
PNG’s IPO plans come amid a turbulent phase for India’s jewellery sector with brands such as Gitanjali Gems and PC Jeweller being embroiled in controversies.
In February, Indian federal agents launched an investigation into billionaire jeweller Nirav Modi and his uncle Mehul Choksi, owner of Gitanjali Gems Ltd, left India after allegedly committing a $2 billion-financial fraud against state-owned Punjab National Bank.
Meanwhile, PC Jeweller was facing allegations that it withheld its business relationship with e-governance service provider Vakrangee, which is under SEBI investigation for alleged price and volume manipulations of its own stock.
In addition, PC Jeweller’s founder PC Gupta gifted some shares to family members through off-market transactions, again raising question marks over the company’s governance standards and significantly eroding the company’s market value.
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