IPO News

Retail Jeweller Joyalukkas India files DRHP with SEBI to raise Rs 2,300 Crs via IPO

Posted On : 2022-03-28 21:56:59( TIMEZONE : IST )

Kerala-based Retail Jeweller Joyalukkas India, one of the leading jewellery companies in the country in terms of revenues in fiscal 2021 has filed its draft red herring prospectus (DRHP) with the markets regulator Securities and Exchange Board of India (SEBI) to raise Rs 2,300 crore through an initial public offering (IPO) with a fresh issue of shares, with no offer for sale component. 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.

Joyalukkas jewellery business involves the sale of gold jewellery, studded jewellery, and other jewellery products including diamonds, platinum, silver, and other precious stones. It has a presence in numerous regions of India, with a focus on the southern states. As of September 30, 2021, 93.33 % of its revenue from operations comes from the south region followed by 3.37% from the west. Also, the company intends to open 8 new showrooms over the next 2 years across Telengana, Maharashtra, Odisha and Karnataka.

The proceeds from its fresh issuance worth Rs. 1,400 crores for the repayment or prepayment of borrowings, in full or part of all or certain borrowings for the company and Rs 463.90 crore for financing the opening of eight new showrooms besides general corporate purposes.

Founded by Promoter and Managing Director, Alukkas Varghese Joy, has over 33 years of expertise in the jewellery industry. It began operations in 2002 by opening a showroom in Kottayam, Kerala, and have since expanded to 85 showroom network under the "Joyalukkas" brand, located across 68 cities in India with an aggregate area of approximately 344,458 square feet, as of January 31, 2022. It has currently engaged film actress Kajol as its celebrity brand ambassador.

Of these 85 showrooms, 6 are large-format showrooms has an area of 8,000 square feet or more, including its largest showroom at Chennai, Tamil Nadu that has an area of over 13,000 square feet. It has a range of over 100,000 jewellery designs, across various price points caters to customers across all market segments. Its large format showrooms provide a luxury experience and customer service, with a combination of inventory and variety of jewellery products enables it to attract and retain a growing customer base exceeding over 2.00 million customers in India.

Its jewellery items are divided into four categories: gold jewellery, diamond jewellery, silver jewellery, platinum and other precious metal/stone-based jewellery, and platinum and other precious metal/stone-based jewellery. Traditional, contemporary, and combination designs are included in the product profile across jewellery lines, usages, and price points, reflecting regional customer preferences and designs. The products are also sold under eight sub-brands, including "Pride," "Eleganza," "Veda," "Apurva," "Ratna," "Zenina," "Masaaki pearls," and "Li'l Joy," which are designed to cater to specific customer niches such as classic jewellery, contemporary jewellery, and polki diamonds and precious stones jewellery, and are subjected to stringent quality control processes, including various official and other tests for different jewellery The products caters for a variety of situations, ranging from everyday casual wear to special occasion wear such as weddings or festivals.

To serve to younger and tech-savvy clientele, the jeweller 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 purchase it and have it delivered to their homes through a partnership with third-party logistics companies.

It also offers purchase advance schemes on its online platform, through its Easy Gold Scheme, where customers can plan for gold jewellery purchases in fixed monthly instalments starting from $1,000 up to ten months in advance, at the current gold rate, and finally receive their purchase at their doorstep.

Joyalukkas clocked a profit of Rs 471.75 crore in the financial year FY21 against Rs 40.71 crore in the previous year. Revenue from operations climbed 0.53 percent from Rs 8,023.79 crore in Fiscal 2020 to 8,066.29 crore in Fiscal 2021, attributable to an increase in retail sales and other operation revenue following the end of COVID-19. According to a company-commissioned Technopack report, in FY21 it recorded the highest EBITDA per square foot and amongst the highest PAT amongst the top players in India. Net Debt to Equity Ratio has fallen from 1.04 in 2019 to 0.77 as on September 30, 2021.

Profit for the six-month period ended September 2021 stood at Rs 268.95 crore on revenue of Rs 4,012. 26 crore.

The size of the Indian jewellery retail sector was close to US$60 billion (Rs 4.58 trillion) in Fiscal 2020, and it is predicted to increase at a CAGR of 9% to reach US$ 91 billion (Rs 6.94 trillion) by Fiscal 2025. However, organised jewellery retail would increase at a quicker rate, with a CAGR of roughly 14% from US$19 billion (Rs 1.45 trillion) in Fiscal 2020 to US$36 billion (Rs 2.75 trillion) in Fiscal 2025. The share of organised jewellery retail in the whole jewellery market is predicted to rise 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 book running lead managers to the issue.