Last day to apply for Motisons Jewellers IPO; should you subscribe?
The price band for the offer has been fixed at ₹52–55 per equity share, with a face value of ₹10 each. Retail investors have the opportunity to submit bids for up to 14 lots, with each lot containing 250 shares. At the upper end of the IPO price band of ₹55, retail investors are required to make a minimum investment of ₹13,750 per lot.
The company’s shares in the grey market are trading at ₹100 on the final day, indicating a 181% premium over the IPO price at listing. Grey market premium indicates investors’ readiness to pay more than the issue price.
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Motisons Jewellers is engaged in the business of selling jewellery made of gold, diamonds, and kundan. In addition, the company also sells jewellery products like pearls, silver, platinum, and other precious and semi-precious metals. In terms of its product offering and positioning, Motisons offers traditional, contemporary, and combination designs across various jewellery lines.
Meanwhile, domestic brokerage firms have advised investors to “SUBSCRIBE” to the IPO.
BP Equities: Subscribe
In the fiscal year 2023, the domestic gems and jewellery market reached an estimated value of ₹4,70,000 crore, with gold jewellery leading the segment, according to Dun & Bradstreet. Notably, the share of the organised sector has risen to 15-20% in recent years, presenting significant opportunities for companies like Motisons Jewellers, said domestic brokerage firm BP Equities.
The company stands out with well-established business practices that seamlessly blend heritage with market sensitivity, a diverse product portfolio catering to various market segments, and strategically located showrooms contributing to enhanced revenue per square foot, the brokerage noted.
Also Read: Retail investors in top gear at IPOs, drive oversubscriptions
Considering valuations, the brokerage stated that the issue offers a P/E multiple of 16.1x of FY23 earnings, which compares favorably to similar ratios in the organised jewellery sector in India. Therefore, BP Equities recommends investors ‘subscribe’ to the IPO for potential listing gains.
Indsec Securities: Subscribe
Indsec Securities also assigns a ‘subscribe’ rating to the IPO. It emphasises that the growth in the Indian jewellery sector is being driven by the rising middle-class population and a significant increase in disposable income among the youth.
According to the brokerage, the company has demonstrated robust financial performance with a CAGR of 31% in revenue, 26% in EBITDA, and 51% in profit after tax over FY21–23.
Swastika Investmart: Subscribe with caution
“The company’s commitment to retail network expansion and technology integration further strengthens its growth prospects. However, the brokerage points out that the highly competitive landscape and dependence on third-party suppliers present key challenges. Additionally, the company is susceptible to negative publicity and seasonal demand fluctuations,” said Swastika Investmart.
Also Read: Motisons Jewellers IPO: Key risk factors in the RHP raise eyebrows
Despite these challenges, the IPO’s attractive valuation at 16x P/E provides a degree of risk mitigation. Considering Motisons’ strong brand, proven track record, and growth plans, alongside the current market sentiment, the brokerage recommends applying for this IPO with cautious optimism.
Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of Mint. We advise investors to check with certified experts before taking any investment decisions.
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Published: 20 Dec 2023, 03:06 PM IST
