Visakhapatnam-headquartered Manoj Vaibhav Gems 'N' Jewellers Ltd, a leading regional jeweller brand in South India having a presence in the micro markets of Andhra Pradesh and Telangana across 8 towns and 2 cities has filed its Draft Red Herring Prospectus (DRHP) with the markets regulator, Securities and Exchange Board of India (SEBI), to raise funds through an initial public offering (IPO).
The public issue with a face value of equity shares of Rs. 10 each is a fresh issue of equity shares aggregating up to Rs 210 cr and an Offer for Sale of 43,00,000 equity shares by Grandhi Bharata Mallika Ratna Kumari (HUF), the Promoter Selling Shareholder.
The company, in consultation with the lead bankers to the issue, may consider a further issue of equity shares for cash consideration aggregating up to Rs 40 crore. If such placement is completed, the fresh issue size will be reduced.
The utilisation of the net proceeds is to finance the establishment of 8 new showrooms costing Rs 12 crs and the purchase of inventory worth Rs 160 crs over FY23 and FY24 besides general corporate purposes.
Vaibhav Jewellers was founded by the Late Mr Manoj Kumar Grandhi in 1994 and is currently being led by a first-generation woman entrepreneur Mrs Bharata Mallika Ratna Kumari Grandhi along with her daughter Grandhi Sai Keerthana.
The jewellery brand was one of the earlier entrants in the organised jewellery market in Andhra Pradesh and Telangana. It operates a hub and spoke model with small-sized showrooms operating around the larger showrooms and addresses to the requirements across all economic segments. Its flagship showroom in Visakhapatnam is spread across 29,946 sq ft and four different floors of shopping experience.
77% of its retail showrooms are in Tier 2 and Tier 3 cities and the rest are in Hyderabad and Vishakhapatnam catering to urban consumers. Each of its showroom houses varied exquisite and large inventory of designs across a wide range of products in Gold, Diamond, Gems, Platinum & Silver Jewellery or Articles. Its sub-brand Visesha caters to a premium segment of gold and diamond jewellery.
As per the Technopak report stated in its DRHP, in FY21, the company had an approximate market share of 14% of the organised market. Other key players in Andhra Pradesh and Telangana are Tanishq, Kalyan Jewellers, Malabar Gold Pvt Ltd, GRT Jewellers and Joyalukkas.
Besides selling on its own website and other market places, it focuses on having a one to one connect with each of its customers , to do so it conducts focused group discussions to educate customers; exhibiting at exhibitions to showcase its new collections and increase brand awareness; direct selling activities and village campaigns. Interestingly they have a marriage cell that has a database of the marriage ecosystem which it uses to approach couples and their families for purchasing jewellery for the occasion.
In FY 22 its revenue from operations stood at Rs 1693.9 crs, majorly from the sale of gold jewellery. In 2005 it stood at Rs 50.9 crs. The Jewellery brands per retail showroom revenue and EBITA metrics stood at Rs 141.16 crs and Rs 8.7 crs respectively. Between FY20-22 the Revenue and PAT grew a CAGR of 15.08% and 33.83%. Its e-commerce sales grew from Rs 4.16 cr in FY 19 to Rs 28.6 crs in FY 22.
The rural market continues to contribute 60% of the jewellery demand in India. Gold is still considered an investment of the future hence despite the price rise the volume of purchases advanced by the rural customer continues to grow particularly for weddings, religious rituals, or post-harvest. It continues to have a special place in Indian Culture and 5 Southern state i.e Andhra Pradesh, Telangana, Tamil Nadu, Karnataka, and Kerala make up 40% of the Indian Jewellery Market.
Bajaj Capital Ltd and Elara Capital (India) Pvt Ltd are the book running lead managers and Bigshare Services Pvt Ltd is the registrar to the offer. The equity shares are proposed to be listed on BSE and NSE.