Ahmedabad-based RBZ Jewellers makes a tepid debut on bourses, lists at Rs 100

The company’s Rs 100-crore IPO was subscribed 16.86 times. According to CRISIL, a key risk for the company is its susceptibility to intense competition in the jewellery industry and to volatility in raw material prices

Ahmedabad: Ahmedabad-based RBZ Jewellers made a tepid debut on bourses on December 27 in line with analyst expectations, listing at par with the issue price. The stock started trading at Rs 100 on the NSE and BSE, against the issue price, also of Rs 100.

The company’s Rs 100-crore IPO was subscribed 16.86 times. Retail investors showcased maximum interest as they bought 24.74 times their allotted quota, while high net-worth individuals picked 9.27 times the reserved portion. On the other hand, qualified institutional buyers picked 13.43 times their reserved portion.

Incorporated in April 2008, RBZ Jewellers Limited is a gold jewellery manufacturer specializing in designing and manufacturing a diverse range of antique bridal gold jewellery, including jadau, meena and kundan work. It operates its retail showrooms under the brand name ‘Harit Zaveri.’ The company’s wholesale customer base includes reputed national, regional, and local family jewellers across 19 states and 72 cities in India.

The fresh proceeds will be utilised primarily for working capital requirements of Rs 80.75 crore. The remaining funds will be kept for general corporate purposes.

RBZ registered a 55% on-year growth in net profit at Rs 22.33 crore for the year ended March FY23. Revenue from operations for the year FY23 stood at Rs 288 crore, growing 14.2% over the previous year, while the EBITDA (earnings before interest, tax, depreciation and amortisation) increased sharply by 41% to Rs 37.8 crore with margin expansion of 249 bps at 13.11% during the same period.

According to CRISIL, a key risk for the company is its susceptibility to intense competition in the jewellery industry and to volatility in raw material prices.

“Since the gold jewellery business has many unorganised players and a few large retailers, competition among them is high; which limits their profitability margins. Furthermore, the company has single-location retail operations and high reliance on a particular customer” the rating agency had said earlier this year.

Courtesy: Moneycontrol, Hindu Business Line