Diamond jewellery company Nakshatra World Ltd, promoted by Gitanjali Gems Ltd, and construction firm Capacit’e Infraprojects Ltd have received the Securities and Exchange Board of India's (SEBI) nod for an initial public offering (IPO).
The capital markets regulator cleared the two proposals last week, taking the number of companies that have received its nod for an IPO this calendar year to 18.
Nakshtra had filed its draft red herring prospectus (DRHP) with SEBI on 10 March. The IPO comprises a fresh issue of 18 million shares to raise up to Rs 400 crore ($60 million). This will result in an approximate stake dilution of 29.16% in the company’s equity capital. VCCircle was first to report that Nakshatra was in advanced stages of filing its draft proposal for an IPO.
The planned issue size is smaller than the Rs 650 crore ($96 million then) that Gitanjali Gems had announced for Nakshatra’s IPO in a stock-exchange filing in December last year.
The wholly-owned unit of Mumbai-based Gitanjali Gems will become the first branded jewellery firm to go public since December 2012, when Delhi-based PC Jeweller Ltd completed its Rs 609-crore IPO. Nakshatra will join other listed peers such as Tara Jewels Ltd, Titan Co. Ltd, Tribhovandas Bhimji Zaveri Ltd, Rajesh Exports Ltd and Shree Ganesh Jewellery House Ltd.
IDBI Capital Ltd and Elara Capital (India) Pvt. Ltd are financial advisers to Nakshatra World’s IPO.
Nakshatra, with nearly a dozen brands under its umbrella including Asmi, Gili, Sangini and Parineeta, is the most profitable subsidiary of Gitanjali Gems. The company reported a consolidated net profit of Rs 73.67 crore for the six months ended September 2016 on a consolidated revenue of Rs 4,000 crore.
In the previous fiscal, i.e., 2015-16, net profit had grown almost five-fold to Rs 80.02 crore on a consolidated revenue of Rs 5,984.30 crore.
Its reliance on exports has been rising though, with the company deriving 62% of its revenue from exports in the six months ended September 2016, compared with 46.65% in 2015-16 and 27.60% in 2014-15, shows the DRHP document.
Nakshatra World's parent Gitanjali Gems went public in early 2006 through an IPO that was subscribed 15.35 times.
Gitanjali Gems is one of India’s largest publicly-listed jewellery retailers. It posted a net profit of Rs 48.76 crore on revenue of Rs 8,603.63 crore for the year ended March 2016.
Gitanjali owns a majority stake in 34 subsidiaries and minority ownership in three companies. The group is led by chairman and managing director Mehul C Choksi.
On Tuesday, Gitanjali Gems’ shares closed on the BSE at Rs 65.55 apiece, down 1.6%, or Rs 0.70, from their close on Monday. The stock has touched a high of Rs 93.60 and low of Rs 35.05 in the past 52 weeks.
Mumbai-based Capacit’e Infraprojects Ltd filed its DRHP on 17 April this year.
The company plans to raise Rs 400 through the IPO, which will help it purchase capital assets and meet its working capital requirements, among other things.
Axis Capital, IIFL Holdings and Vivro Financial Services are financial advisers to the Capacit’e public issue.
Capacit’e will join several infrastructure and construction firms that have gone public in the last 18 months, such as Shankara Building Projects Ltd, Sadbhav Infrastructure Project Ltd, PNC Infratech Ltd, MEP Infrastructure Developers Ltd and Dilip Buildcon Pvt. Ltd.
The company caters to residential, commercial and institutional buildings, primarily in the Mumbai Metropolitan Region, the National Capital Region and Bengaluru. Its order book stood at more than Rs 4,000 crore as of 31 January.
Last month, Capacit’e received orders worth Rs 1,500 crore from leading real estate developers, such as the Oberoi, Wadhwa, Rustomjee and Kalpataru groups in Mumbai, Emaar in Gurgaon and Ozone in Bengaluru. It has 51 ongoing projects, according to the DRHP.