Review By on September 13, 2016
Radhika Jeweltech Ltd (RJL) is a well known and trusted jewellery retailer having showroom on Palace Road, Rajkot, the main market for buying Jewellery. It primarily sell gold jewellery and diamond studded Jewellery. The design and manufacture of products is done either in house or by third parties on job work basis. RJL's products have presence across different price points to cater to all customers across high-end, mid-market and value market segments.
Apart from own Jewellery the company is also dealing in trading of branded jewellery. The Company deals only in jewelry certified by BIS Hallmark. Since the system of hallmarking was legally introduced, Radhika Jewellers had been certified under the system. The quality Assurance department monitors and examines the jewelry designs inward in the stock to match the standard, thus the quality standard of gold jewelry dealt with is maintained throughout.
To part finance its working capital requirements and general corpus funds, the company is coming out with a maiden IPO of 6600000 equity shares of Rs. 10 each at a fixed price of Rs.75 per share to mobilize Rs. 49.50 crore. Issue is solely managed by Corporate Strategic Allianz Ltd and Satellite Corporate Services Pvt Ltd is the registrar to the issue. Issue opens for subscription on 14.09.16 and will close on 20.09.16. Minimum application is to be made for 1600 shares and in multiples thereon, thereafter. Its entire current equity is issued on 'other than cash' basis. Post issue its paid up capital will stand enhanced from Rs. 17.00 crore to Rs. 23.60 crore. Post allotment, shares will be listed on BSE SME.
On performance front, for last two year's its turnover /net profits were Rs. 133.70 cr. / Rs. 2.60 cr. (FY15), Rs. 137.16 cr. / Rs. 1.97 cr. For the current fiscal, till 22.07.16 it has posted turnover of Rs. 31.56 cr. with a net profit of Rs.0.54 cr. If we attribute latest earnings on fully diluted equity post IPO then asking price is at a 100 P/E that makes it a highly priced issue. Other listed peers are trading around 7 to 36 P/E.
On merchant banker's front, this is the seventh issue from its stable and earlier issues, most of them have shown dismal performance post listing.
Conclusion: No harm in giving this IPO a miss.
Review By on September 13, 2016
Dilip Davda is a veteran financial journalist associated with the Indian stock market since 1978. He has been contributing to print and electronic media on capital markets, insurance, and finance since 1985.
He is widely recognized for reviewing public issues and non-convertible debentures (NCDs) in the primary market. Drawing on over three decades of market experience and close interaction with merchant bankers, his reviews focus on detailed fundamental and financial analysis of companies, with a special emphasis on SME public issues.
Dilip Davda
SEBI Registered Research Analyst – Mumbai
Registration No.: INH000003127 (Perpetual)
Email: dilip_davda@rediffmail.com
Disclaimer: The information provided herein is solely for educational and informational purposes and does not constitute an offer, solicitation, or recommendation to buy or sell any securities. Readers are advised to consult a qualified financial advisor before making any investment decisions. Investments in the securities market are subject to market risks. The author does not intend to invest in the securities discussed.
The initial public offer (IPO) of Radhika Jeweltech Ltd. offers an early investment opportunity in Radhika Jeweltech Ltd.. A stock market investor can buy Radhika Jeweltech IPO shares by applying in IPO before Radhika Jeweltech Ltd. shares get listed at the stock exchanges. An investor could invest in Radhika Jeweltech IPO for short term listing gain or a long term.
Read the Radhika Jeweltech IPO recommendations by the leading analyst and leading stock brokers.
Radhika Jeweltech IPO offers an opportunity to buy IPO shares before they get listed at the stock exchanges. Read the Radhika Jeweltech IPO Notes, Analysis and Recommendations by leading stock brokerage firms and experts mentioned in the above answer to "How is Radhika Jeweltech IPO?"
Our recommendation for Radhika Jeweltech IPO is to avoid.
As per the analysis by our lead analyst Mr. Dilip Davda, we suggest you to avoid the Radhika Jeweltech IPO.
The Radhika Jeweltech IPO allotment status will be available on or around [.]. The allotted shares will be credited in demat account by [.]. Visit Radhika Jeweltech IPO allotment status to check.
