Kerala-based retail jeweler Joyalukkas India files DRHP with SEBI to raise Rs 2,300 cr via IPO
Kerala-based retail jeweler Joyalukkas India has filed its Draft Red Herring Prospectus (DRHP) with market regulator Securities and Exchange Board of India (SEBI) to raise Rs 2,300 crore through a initial public offering (IPO) with a new issue of shares, with no element of an offer for sale.
The issue has a nominal value of Rs 10 per share for the proposed share sale. The offering is being made through the bookmaking process, wherein no more than 50% of the offering must be available for allocation to qualified institutional buyers, no less than 15% of the offering must be available for allotment to non-institutional bidders and not less than 35% of the Bid will be available for allotment to Individual Retail Bidders.
Joyalukka’s jewelry business involves the sale of gold jewelry, studded jewelry and other jewelry products including diamonds, platinum, silver and other gemstones. It is present in many parts of India, especially in the southern states.
As of September 30, 2021, 93.33% of its operating revenue came from the south region, followed by 3.37% from the west. Additionally, the company intends to open eight new showrooms over the next 2 years across Telengana, Maharashtra, Odisha and Karnataka.
The proceeds of its new issue worth Rs 1,400 crores for repayment or prepayment of borrowings, in whole or in part, of all or part of the borrowings of the company and Rs 463.90 crores to finance the opening of eight new showrooms in addition to general business needs.
It was founded by promoter and managing director, Alukkas Varghese Joy, who has over 33 years of expertise in the jewelry industry. It started its business in 2002 by opening a showroom in Kottayam, Kerala and has since expanded to 85 network of showrooms under the brand “Joyalukkas”, located in 68 cities in India with an area total of approximately 344,458 square feet, as of January 31. 2022.
Of these 85 showrooms, 6 are large-format showrooms with an area of 8,000 square feet or more, including its largest showroom in Chennai, Tamil Nadu, which has an area of over of 13,000 square feet. It offers a range of over 100,000 jewelry designs, across various price points, caters to customers in all market segments. He currently engaged movie actress Kajol as his celebrity brand ambassador.
Its jewelry items are divided into four categories: gold jewelry, diamond jewelry, silver jewelry, platinum and other precious metals/precious stones jewelry, and platinum and other precious metals/precious stones jewelry. Traditional, contemporary and combination designs are included in the product profile across jewelry lines, uses and prices, reflecting regional customer preferences and designs. Products are also sold under eight sub-brands, including “Pride”, “Eleganza”, “Veda”, “Apurva”, “Ratna”, “Zenina”, “Pearls Masaaki” and “Li’l Joy”, which are designed to meet specific customer niches such as classic jewelry, contemporary jewelry, and diamond and polki gemstone jewelry, and undergo rigorous quality control processes, including various official and other tests for different jewelry . The products cater to a variety of situations, ranging from everyday casual wear to special occasion wear such as weddings or festivals.
To serve a younger, tech-savvy clientele, the jeweler launched its online portal, www.joyalukkas.in, in March 2018, where customers can browse the platform’s library based on their preferences, collections and designs, then buy it and have it delivered. at home through a partnership with third-party logistics companies.
It also offers advance purchase programs on its online platform, through its Easy Gold Scheme, where customers can plan gold jewelry purchases in fixed monthly installments starting at $1,000 for up to ten months at advance, at the current gold rate, and finally receive their purchase. at their doorstep.
Joyalukkas recorded a profit of Rs 471.75 crore in the FY21 financial year against Rs 40.71 crore the previous year. Operating income increased by 0.53% from Rs 8,023.79 crore in FY 2020 to Rs 8,066.29 crore in FY 2021, due to an increase in retail sales and other operating income after the end of COVID-19.
According to a Technopack report commissioned by the company, in FY21, it had the highest EBITDA per square foot and one of the highest PATs among top players in India. The net debt to equity ratio fell from 1.04 in 2019 to 0.77 as of September 30, 2021
Profit for the six-month period ended September 2021 amounted to Rs 268.95 crore on revenue of Rs 4,012. 26 crores.
The size of India’s jewelry retail sector was close to $60 billion (Rs 4.58 trillion) in fiscal 2020, and it is expected to grow at a CAGR of 9% to reach $91 billion. dollars (6.94 trillion rupees) by FY 2025. However, organized jewelry retail would grow at a faster rate with a CAGR of around 14% from $19 billion (1 .45 trillion rupees) in FY 2020 to $36 billion (2.75 trillion rupees) in FY 2025. The share of organized jewelry retail in the overall market jewelry business is expected to grow from 32% in fiscal 2020 to 40% in fiscal 2025.
Edelweiss Financial Services Limited, Haitong Securities India Private Limited, Motilal Oswal Investment Advisors Limited and SBI Capital Markets Limited are the lead managers of the issue.