What You Must Know About Utssav Cz Gold Jewels IPO: Price Band ₹104 to ₹110 Per Share

About Utssav Cz Gold Jewels Limited

Established in November 2007, Utssav Cz Gold Jewels Limited has made a name for itself in the jewellery industry. The company designs, manufactures, wholesales, and exports 18K, 20K, and 22K CZ Gold jewellery, focusing on lightweight cubic zirconia (CZ) gold and rose gold pieces. In the 2023 financial year, 18K and 22K gold jewellery comprised 73.27% and 24.94% of total sales, respectively. This trend continued into early 2024.

Their product range includes rings, earrings, pendants, bracelets, necklaces, watches, and brooches, catering to various preferences and occasions from daily wear to special events. Located in Andheri East, Mumbai, their modern facility spans 8,275 square feet. Equipped with advanced machinery and skilled artisans, it has an annual production capacity of 1,500 kg. Utssav Cz Gold Jewels has a strong presence in India, covering 17 states and 2 union territories, and has expanded to 2 international markets. They have solid relationships with major jewellery retailers like D.P. Abhushan Limited and Kalamandir Jewellers Limited.

With a team of 15 CAD designers, the company creates about 400 new designs monthly to keep its offerings fresh and aligned with market trends. As of March 31, 2024, Utssav Cz Gold Jewels employs 69 permanent staff, including craftsmen, designers, administrative, and management personnel, all of whom contribute to the company's growth.

Highlights of the Utssav Cz Gold Jewels IPO

Utssav Cz Gold Jewels IPO is offering its shares to the public with the following details:

•    The company want to raise ₹ 69.50 crores by selling new shares.

•    The company is selling 63.18 lakh new shares.

•    The IPO opens on July 31, 2024, and closes on August 2, 2024.

•    The company expect to offer shares to buyers on August 5, 2024.

•    The shares should start trading on the stock market on August 7, 2024.

•    The price for each share will be between ₹ 104 to ₹ 110.

•    The minimum number of shares an investor can buy is 1200 to take part in. The smallest amount a regular investor can put in is ₹ 132,000. Big investors need to buy at least 2,400 shares, which costs ₹ 264,000.
 

The IPO is being managed by Choice Capital Advisors Pvt Ltd as the book running lead manager, with Bigshare Services Pvt Ltd serving as the registrar. Choice Equity Broking has been appointed as the market maker for the issue.
 

Utssav Cz Gold Jewels IPO: Key Dates

Here are the key dates to remember:
 

IPO Allocation & Minimum Investment Lot Size

IPO shares will be allocated as follows:

Investors can apply with the following lot sizes:

Financial Highlights: Utssav Cz Gold Jewels Limited

The following table outlines our key performance indicators (KPIs) for the ten months ended January 31, 2024, and the financial years ended March 31, 2023, 2022. (₹ in lakhs, unless stated otherwise)

Source: NSE - Utssav Cz Gold Jewel LtdDRHP

The company's revenue from operations has more than doubled from ₹12,022.72 lakhs in FY2021 to ₹23,818.61 lakhs in FY2023, with the first ten months ended January 31, 2024, revenue from operations already surpassing the previous year's at ₹27,595.41 lakhs. Profitability has also improved substantially, with EBITDA increasing from ₹361.95 lakhs in FY2021 to ₹1,388.52 lakhs in FY2023 and the EBITDA margin expanding from 3.01% to 5.83% over the same period. Net profit after tax has grown more than fourfold from ₹161.87 lakhs to ₹714.96 lakhs, with the net profit margin improving from 1.35% to 3.00%. The company's efficiency metrics have also shown positive trends, with Return on Net Worth increasing from 14.79% to 38.17% and Return on Capital Employed rising from 9.93% to 21.72% between FY2021 and FY2023. The Debt-Equity Ratio has slightly improved from 2.57 to 2.22, indicating better financial leverage. Working capital management has become more efficient, with Days Working Capital reducing from 120 days in FY2022 to 94 days in FY2023. Lastly, the Interest Coverage Ratio has improved from 3.0 to 3.58, suggesting better ability to meet interest obligations. These trends indicate overall financial improvement.

Several key points should be considered when considering an investment in Utssav Cz Gold Jewels Limited's IPO. Firstly, the industry in which Utssav Cz Gold Jewels operates is highly competitive and fragmented, which could affect the company's future growth and profitability. Additionally, there is a discrepancy in the financial data: while the company has provided data up to January 31, 2024, the offer price is based on data from March 31, 2023, raising questions about the transparency of the pricing mechanism.

In April 2024, the company issued shares through a private placement at ₹82.50 per share. The current IPO price band of ₹104 - ₹110 represents a significant premium over this recent placement price, prompting potential investors to seek clarification on this substantial increase within a short period.
Given the industry's competitive nature and the above considerations regarding pricing, this IPO could be viewed as a high-risk investment. It is essential to weigh the potential returns against these risks carefully. Moreover, the stock's performance post-listing will depend on the company's performance and overall market conditions, as well as investor sentiment towards the jewellery sector.