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Review By K.M. Global Financial Services Ltd on November 22, 2012
Issue Period November 21st-23rd
Issue Price (Rs) 225-230
Issue Size (Rs Cr) 180
Mcap (Rs Cr) 555-565
Listing NSE , BSE
Promoters Mr. Rajeev Sheth
Minimum Order Size 50
CARE Rating Grade 3/5
Grey Market Premium Rs 2.5
Enam Securities Pvt Ltd
ICICI Securities Ltd
Offer For Sale (M Fabrikant) 70.0
20 New Retail Stores In 18 Cities 66.4
Repayment of Loans 50.0
Tara Jewels is an integrated player as its operations range from designing to retailing of jewellery . The business can be divided into three divisions namely manufacturing, exporting and retailing. The company has four manufacturing units, one of which is located in Panyu, China while the other three units are located in Mumbai.
Marquee Global Clients - Exports constitute over 80% of revenues and the company's export income has grown at a CAGR of 13 % from FY08 to FY12. It has large customers such as Walmart which ensures that its products reach a large number of end users. The investment by Swarovski could also lead to strategic developments.
Adding 20 Retail Stores Across India - The retail business was started in 2008 and has quickly ramped up to 30 stores with a turnover of Rs 266 cr in FY12. Tara jewels plans to add another 20 stores in Tier II and Tier III cities across western and northern parts of India with an average store size of around 1,000 sq feet.
Concentration of Customers - Over 70% of Tara's exports were sourced from its top 10 customers in FY12 as shown in the adjoining table. There are no long-term contracts with any of these customers and the loss of a single customer can significantly affect the top line.
Large Working Capital Requirements - Tara supplies jewellery to customers on credit. It also provides performance guarantees in favour of some customers to secure contractual obligations and bank guarantees to suppliers of gold. Any large order cancellations can severely affect its operations and profitability.
Review By K.M. Global Financial Services Ltd on November 22, 2012
The initial public offer (IPO) of Tara Jewels Ltd. offers an early investment opportunity in Tara Jewels Ltd.. A stock market investor can buy Tara Jewels IPO shares by applying in IPO before Tara Jewels Ltd. shares get listed at the stock exchanges. An investor could invest in Tara Jewels IPO for short term listing gain or a long term.
Read the Tara Jewels IPO recommendations by the leading analyst and leading stock brokers.
Tara Jewels IPO offers an opportunity to buy IPO shares before they get listed at the stock exchanges. Read the Tara Jewels IPO Notes, Analysis and Recommendations by leading stock brokerage firms and experts mentioned in the above answer to "How is Tara Jewels IPO?"
Our recommendation for Tara Jewels IPO is to avoid.
As per the analysis by our lead analyst Mr. Dilip Davda, we suggest you to avoid the Tara Jewels IPO.
The Tara Jewels IPO allotment status will be available on or around [.]. The allotted shares will be credited in demat account by [.]. Visit Tara Jewels IPO allotment status to check.
RHP