Jaipur-based Retail Jeweller player Motisons Jewellers, 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) with a fresh issue of 3,34,71,000 equity shares, with no offer for sale component.
The company had filed preliminary IPO papers with Sebi in September last year.
The issue has a face value of Rs 10 per equity share for the proposed share sale. The Offer is being made through the Book Building Process, wherein not more than 50% of the Offer shall be available for allocation to Qualified Institutional Buyers, not less than 15% of the Offer shall be available for allocation to Non-Institutional Bidders and not less than 35% of the Offer shall be available for allocation to Retail Individual Bidders.
The company, in consultation with the lead banker to the issue, may consider a pre-IPO placement of up to 60,00,000 equity shares for cash consideration. If such placement is completed, the fresh issue size will be reduced.
The proceeds from its fresh issuance worth Rs 58 crores for the repayment of existing borrowings availed by the company from scheduled commercial banks, Rs 71 crore for funding working capital requirement besides general corporate purposes.
Motisons Jewellers is managed by second generation entrepreneurs, Sandeep Chhabra, Chairman & Whole Time Director and Sanjay Chhabra, Managing Director, sons of Late Moti Lal Chhabra, who have over two decades' years of expertise in the jewellery industry. It began operations in 1997 by opening a showroom in Johri Bazaar in Jaipur, Rajasthan, with approx. 304 sq. ft. in area and with growth in the business expanded it to 1355 sq. ft. by 2002. The flagship store 'Motisons Tower' is located at Tonk Road, Jaipur with an area of approx. 11,700 Sq Ft and has 3 floors, a floor each dedicated for silver, gold, and diamond jewellery respectively.
Currently it has a 4 showroom networks under the "Motisons" brand, located across the city of Jaipur, with the most recent outlet, opened in the year 2021, at Vaishali Nagar. Its manufacturing facilities are located at Sitapura Industrial area and Bapu Nagar, Jaipur.
It primarily sources finished jewellery from third party suppliers located across India and its business involves sale of jewellery made of gold, diamond, kundan and sale of other jewellery products that include pearl, silver, platinum, precious, semi-precious stones and other metals, gold and silver coins, utensils and other artifacts across multiple prominent locations in Jaipur, Rajasthan.
Its product portfolio comprises of over 300,000+ jewellery designs that includes traditional, contemporary and combination designs for special occasions such as weddings and festivals to daily wear jewellery for all ages, genders and across various price points.
The jeweller launched its website in 2011 and commenced online sales in 2018 to serve younger and tech-savvy customers, who can browse the catalogue based on preferences, collections and designs, and purchase the jewellery directly and have it delivered to their homes. It also arranges virtual appointments to assist its customers.
Motison's clocked a profit of Rs 14.75 crore in the financial year FY22 against Rs 9.67 crore in the previous year. Its profit for the six-month period ended September 2022 stood at Rs 10.00 crore on revenue of Rs 162.02 crore. The companies' revenue from operations climbed 47.55% from Rs 213.04 crore in fiscal 2021 to Rs 314.33 crore in Fiscal 2022, attributable to an increase in sale of jewellery i.e., gold and studded jewellery.
According to the CareEdge Report in its DRHP, in FY22 it recorded the second best Debt EBITDA ratio of 3.91 amongst its listed peers in India. Its Debt to Equity Ratio has fallen from 1.50 in 2020 to 1.28 as on September 30, 2022 where as other players like Thangamayil Jewellers have seen an increase in its debt to equity ratio from 1.07 in FY19 to 1.50 as on September 30, 2022.
Additionally states, the G&J industry's market size was estimated to close at USD 60 billion in CY21. The Indian jewellery market is traditionally dominated by gold jewellery. In CY21, the total demand for gold by Indian consumer was estimated at 800 tonnes. Compared to the previous year the demand for gold witnessed a growth of approximately 78% in CY21. A majority of the demand in CY21 came from gold jewellery which was approximately 75% (600 tonnes). There has also been a noticeable shift towards more informal and everyday use of diamond studded jewellery.
Holani Consultants Private Limited is the sole book running lead manager to the issue and Link Intime India Private Limited is the registrar to the issue.