Motisons Jewellers made a resounding debut on the stock exchanges, creating a buzz in the financial market. The shares opened at a staggering ₹109 per share, an impressive 98.18% higher than the issue price of ₹55. On the BSE, the initial listing was at ₹103.90 per share, maintaining a premium of ₹48.55.
However, the stock has now hit the lower circuit at ₹103.55, with a reduced premium of ₹45. Traders are advised to consider selling and exiting, anticipating that the stock will continue to trade in trade-to-trade segments for the next nine sessions.
As of now, a substantial volume of a crore shares has been traded across both exchanges, with the volume steadily increasing.
Company Overview and IPO Details
Motisons Jewellers, a major player in the retail jewellery market in Jaipur, Rajasthan, has been in operation since October 1997. The company boasts four stores and offers a diverse product portfolio, featuring over 3,000 jewellery designs in gold, diamond, kundan, and silver categories.
During its recent Initial Public Offering (IPO), Motisons Jewellers aimed to raise capital in the price band of ₹52-55 per share, with a lot size of 250 shares. The IPO, held from December 18 to December 20, was a massive success, oversubscribed at 159.61 times. The qualified institutional bidders (QIBs) subscribed 157.40 times, non-institutional investors 233.91 times, and retail investors 122.28 times.
The IPO raised over ₹151 crore, solely from the sale of 2,74,71,000 fresh shares. Holani Consultants served as the sole book running lead manager, and Link Intime India acted as the registrar for the issue.
Financial Performance and Utilization of Funds
Motisons Jewellers has exhibited robust financial performance in recent years. The company recorded a doubling of net profit over the last two years, reaching Rs 22.2 crore in the fiscal year ending March FY23. Revenue also witnessed significant growth, surging by 16.5% to Rs 366.2 crore compared to the previous year. EBITDA increased by 26.9% year-on-year to Rs 49 crore, with a margin expansion of 109 bps at 13.37%.
The company plans to utilize the net fresh issue proceeds for debt repayment (Rs 58 crore), working capital requirements (Rs 71 crore), and general corporate purposes. As of June FY24, Motisons Jewellers’ total borrowings stood at Rs 166 crore.
Risks and Challenges
Despite its promising performance, Motisons Jewellers faces certain risks that investors should consider. The promoters, Sanjay Chhabra and Sandeep Chhabra, have been investigated for alleged betting in IPL cricket matches and have been subjects of SEBI investigations. Additionally, an inquiry was initiated against a promoter group company for allegedly entering into non-genuine trades, according to the RHP.
Moreover, all four of the company’s showrooms are concentrated in Jaipur, exposing it to potential adverse developments specific to the region that could impact profits.
In conclusion, Motisons Jewellers’ blockbuster debut and strong financials showcase its potential in the market. However, investors must carefully weigh the risks associated with the company’s promoters and regional concentration before making informed decisions in this dynamic market environment.