Motisons Jewellers IPO Day 2: Should You Subscribe?

Motisons Jewellers ₹151.09 crore IPO is witnessing robust demand as it is already oversubscribed 27 times on the second day of bidding, December 19.

Retail investors took the lead in subscription, oversubscribing by an impressive 38.97 times, while high net-worth individuals demonstrated substantial interest by picking up shares 26.84 times. Qualified institutional buyers secured 9% of the allotted quota.

The public issue, scheduled to conclude on December 20, comprises a fresh issue of 2.74 crore shares. Motisons Jewellers plans to utilize the net proceeds from the fresh issue, with Rs 58 crore allocated for debt repayment and Rs 71 crore earmarked for fulfilling working capital requirements. The remaining funds will be utilized for general corporate purposes. The issue is priced in the range of Rs 52-55 per share.

Prior to the IPO, the company successfully raised Rs 36.3 crore from two anchor investors on December 15.

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With all this interest, should you subscribe to the Motisons Jewellers IPO?

Established in October 1997, Motisons Jewellers specializes in the sale of gold, diamond, and kundan jewelry. In addition to these, the company also offers pearls, silver, platinum, and other metals.

Here’s a look at the company’s financial figures for the last three years.

Financial Year	Revenue	EBITDA	EBITDA Margin	Profit
FY21	213.0	31.1	14.6%	9.7
FY22	314.3	38.6	12.3%	14.7
FY23	366.2	49.0	13.4%	22.2

Analysts at Ventura assigned the “subscribe” rating for the IPO. In its note, the brokerage said that Motisons Jewellers is strategically positioning itself for continued growth by aiming to expand its retail network in a cost-efficient manner, leveraging the strength of the ‘Motisons’ brand. The company’s expansion strategy extends beyond its current footprint, with a focus on addressing existing gaps in its product and brand portfolio to reach a wider consumer base.

However, the analyst warned that all four showrooms are currently concentrated in a single geography, namely Jaipur, and Rajasthan. While this geographical concentration has its advantages, such as a strong local brand presence, any adverse developments affecting this region could potentially have a significant impact on the company’s business, prospects, financial condition, and results of operations.

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