(i) We are a retailer, wholesaler and exporter of gold jewellery. We have a retail outlet in Mumbai. We also export our products (gold jewellery studded with diamond) to overseas buyers. We also sell our products to wholesalers
(ii) Our Company was awarded the India SME 100 Award for being SME Achievers of 2015-16 for scoring in the Top 100 among 41832 nominations by India SME Forum in the overall evaluation of financial and non financial parameters.
(iii) We primarily sell gold jewellery i.e. Chains, Rings, Bangles, Necklace, Mangalsutra, Bracelet, Earrings and other jewellery studded or non-studded with pearls, diamonds, American diamonds and other precious stones. Further, we also have product line of antique and kundan Jewellery. Further, we also have variety of Italian jewellery products which is famous for its machine designs and light weighted jewellery.
(iv) We offer our Jewellery across different price ranges from low to high to cater on large scale customer base. We help our customers to choose the best suited product according to latest trends and fashion. We majorly procure required gold from various banks. We also procure gold and precious stones from local markets. We are located in jewellery hub of Mumbai which give us an added advantage in terms of procurement.
(v) Our products are primarily exported to countries such as the U.A.E and USA. We have received the registration as “One Star Export House” from Directorate General of Foreign Trade, Ministry of Commerce & Industry, Government of India.
The company is coming up with an IPO to issue 36,00,000 shares at a price of 37 thereby raising 13.32 cr. The utilization of the fund as per prospectus is:
1. Augmenting additional working capital requirements= 10.98 cr
2. General Corporate Expense= 1.882 cr
3. Meeting Issue Expenses= 45 lakh
(i) Ketan M. Shroff, aged 46 years, is the Managing Director of our Company. He is a resident Indian national. He is an under graduate. He has experience of over 25 years in the bullion market, gold jewellery business, commodities, FOREX and precious metals. He is known in giving updates in relation to international economy impacts on the Gold Industry to various journals and news papers. He is the National Joint Secretary of the India Bullion and Jewellers Association limited. He has been on our Board since the incorporation of our Company. He is entrusted with the responsibility of looking after the overall management and operations, planning and implementation of the strategies of our Company.
(ii) Dipti Ketan Shroff, aged 45 years, is a Non Executive Director of our Company. She holds a bachelor’s degree in Commerce from Mumbai University. She has also completed MCX–DICM (Diploma in Commodities Market) from Welingkar Institute of Management Development & Research, Mumbai and Certificate Programme in Capital Markets from Jamnalal Bajaj Institute of Management Studies, Mumbai University. She has experience of over 13 years in gold & bullion industry and equity market. She provides overall operations and administrative guidance to our Company. She has been on the Board of our Company since March 2, 2017.
Authorized Share Capital
( 1,50,00,000 shares at FV@10)
Issued, Subscribed,& Paid-up Share Capital Before Issue
(91,25,000 Shares at FV@10)
(36,00,000 Shares at FV@10)
Reservation for Market Maker
(1,80,000 Shares at FV@10)
Net Issue to Public
(36,00,000-1,80,000= 34,20,000 Shares)
Retail Quota(<2 Lkah)[17,10,000 Shares]
HNI & QIB Quota(>2 Lakh)[17,10,000 Shares]
Paid Up Share Capital after the issue
Financials of Penta Gold Limited IPO as per DRHP:
1. Balance Sheet Snippet[ All Calculation for FY 16-17]
(i) Shareholders’ Fund[Equity] Value
(v) Net Worth(Asset- Liability)
(vi) RONW(PAT/Net Worth)
2. Profit n Loss Snippet
(i) The Revenue of the company is inconsistent in last 4 years expect for the FY ending 31.03.2014 when it was quadrupled.
(ii) PAT of the company was growing at CAGR of 46% till FY ending 31.03.2016 but company's profit has gone down by 5% in FY ending 31.03.2017 on account of increased " Finance Cost".
(iii)Margins(PBT/Reveune): .31 to 1% in last 4 years. The company has very low margin business.
(iv) Annualized EPS(post issue)= 1.32
(v) Annualized P/E(post issue)=28 at the cutoff price of 37
3. Cash Flow Statement
(i) Net Cash Generated from Operation
(ii) Net Cash Generated from Investment
(iii) Net Cash Generated from Financing Activity
(iv) Total[ (i)+(ii)+(iii) ]
(v) Cash and Cash Equivalents at the Beginning of the Year
(vi) Cash and Cash Equivalents at the end of the Year
Comparison With Peers:
Name of the Company
Penta Gold Limited
Vaibhav Global Ltd
Renaissance Jewellery Ltd
DP Abhushan Ltd
Recommendation on Penta Gold Limited IPO:
The issue seems to be fully priced at a PE of 28. The current sentiments of the market is against the Jewelry and diamond sector due to recent scam in of Nirav Modi.