NEW DELHI: The much anticipated Senco Gold’s initial public offering (IPO) was subscribed more than 73 times on Thursday, the last day of the issue. The issue saw maximum interest from qualified institutional buyers (QIBs), who barely made any bids till the second day even as Senco had allocated around 50% of its offer to QIBs. On the last day of the bidding, QIB’s portion was subscribed by a whopping 181 times.
About 35% of the issue which was available to retail investors was subscribed 15 times while the remaining 15% of the issue allocated to non-institutional bidders was subscribed 65 times. The jewellery retailer’s shares were trading at over 35% premium in the grey market over the upper end of the price band, indicating a positive listing gain.
Senco, which has a strong presence in Eastern India, has fixed IPO price band at Rs 301 to Rs 317 per equity share. The company is looking to raise Rs 405 crore from the issue of which Rs 121.50 crore has already been raised from 21 anchor investors. The IPO comprises a fresh issuance of shares worth Rs 270 crore and an offer-for-sale (OFS) of equity shares worth Rs 135 crore by investor SAIF Partners India IV. Most analysts have recommended subscribing to the issues owing to the reasonable valuation. At the upper price band of Rs 317, Senco Gold is available at a P/E of 15.5x (FY23), lower than industry peers’ valuations.
“Improving economic growth, rising urbanisation, increasing disposable income levels, and mandatory hallmarking is positive for the organised players. A strong brand name and a legacy of over five decades, strong company-operated showrooms, and an established asset-light ‘franchise’ model are expected to benefit Senco Gold. Therefore, we assign a ‘Subscribe’ rating for the issue,” said analysts at Geogit Financial Services.