State-run Ircon, jewellery chain PN Gadgil and two others get SEBI nod for IPO

By Ankit Doshi

  • 16 Jul 2018
State-run Ircon, jewellery chain PN Gadgil and two others get SEBI nod for IPO
Credit: Shah Junaid/VCCircle

State-run railway infrastructure engineering and construction company Ircon International Ltd, Pune-based retail jewellery chain PN Gadgil & Sons Ltd, and two other firms have received the regulatory nod to float their respective initial public offerings (IPOs).

Capital markets regulator Securities and Exchange Board of India (SEBI) issued final observations to Ircon International and PN Gadgil on 12 July and 13 July, respectively.

Two other firms, agri-input company KPR Agrochem and engineering, procurement and construction firm GR Infraprojects, received go-aheads on 10 July and 11 July, respectively.


This means that 33 firms have so far received SEBI approval to go public in 2018. As many as 46 firms had received clearance for IPOs in 2017, according to SEBI’s website.

The government, which is acting as the promoter through the Ministry of Railways, has proposed to sell 9.90 million Ircon shares, or a 10.53% stake in the company, through the public float.


The Centre will get three years to pare its stake to 75%, or below, from the date of listing, to meet SEBI’s norms on 25% minimum public float.

The IPO size is estimated at Rs 1,000 crore, according to people in the know.

In May last year, VCCircle had reported about the appointment of merchant bankers for the proposed listings of railway firms, including Ircon.


The share sale is part of the government’s efforts to raise Rs 80,000 crore ($12.5 billion) from stake sales in state-run companies in the financial year 2018-19. It seeks to boost rural and infrastructure spending as well as contain fiscal deficit ahead of the 2019 general elections.

The government had recently pared its stake in aircraft maker Hindustan Aeronautics Ltd, Bharat Dynamics Ltd, railway consulting firm RITES, and alloy maker Mishra Dhatu Nigam Ltd as part of its disinvestment programme for the current fiscal year.

IDBI Capital Markets & Securities, Axis Capital and SBI Capital Markets are merchant bankers managing the IPO.


GR Infraprojects

Delhi-based GR Infraprojects had to refile its DRHP. It submitted its revised proposal to SEBI on 30 April.

The company had originally filed an IPO proposal in September 2016 and had received regulatory approval in December that year. However, in January 2017, the builder sold two road projects to IDFC Alternatives for Rs 330 crore, latest IPO documents show. IDFC Alternatives is the private equity arm of Mumbai-based infrastructure financing firm IDFC Ltd.


VCCircle had reported last June that GR Infraprojects, which counts Motilal Oswal Private Equity as an investor, was looking to refile for the IPO after selling the road assets.

The fresh filing reflects changes in the company’s financials and valuation because of the sale.

The total issue size is estimated at Rs 1,800 crore, according to two people aware of the matter. This is more than triple the Rs 500 crore issue size originally.

The IPO comprises a fresh issue of shares worth Rs 500 crore. It also includes a secondary sale of nearly 11.23 million shares collectively by its PE investor, the promoters and other shareholders. Motilal Oswal Private Equity has proposed to sell 8.74 million shares out of the 9.84 million shares it owns, according to the new proposal.

Accounting for the issue of fresh shares, the IPO may result in 14-15% stake dilution, VCCircle estimates show. Promoter holding may fall to 81-82% from 85.60% while Motilal Oswal Private Equity’s holding is likely to decline to 1% from 9.9%, the estimates show.

HDFC Bank, IDFC Bank, Motilal Oswal Investment Advisors, and Yes Securities (India) are merchant bankers managing the IPO.

PN Gadgil

The Pune-based jewellery firm had filed its DRHP on 4 May.

The offering is entirely a fresh issue of shares worth Rs 500 crore (around $75 million), as per the draft red herring prospectus.

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.

YES Securities (India) and HDFC Bank are the merchant bankers managing the IPO of PN Gadgil, also known by its brand name PNG Jewellers.

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