Thursday, December 6, 2012

Tara Jewels IPO

Tara Jewels, Mumbai based jewelry manufacturer and exporter, has come out with an IPO of Rs 179.5 crore. The company conducts jewelry retail operations under the brand "Tara Jewellers". It currently operates 30 existing stores that spread over an aggregate area of 29,949.01 square feet. The IPO consists of a fresh issue of equity shares worth Rs 109.5 crore and an offer for sale of Rs 700 crore worth of shares by Fabrikant H K Trading Limited.

The IPO shall open on 21 November, 2012 and shall close on 23 November, 2012. The company has fixed a price band of Rs 225-230 per share. Bids can be made for a minimum of 50 equity shares and in multiples of 50 shares thereafter.

The company intends to launch 20 project stores across India by March 31, 2013. The company intends to utilize the proceeds of the IPO for expenses of establishing retail stores and payment of loans. Net profit of the company rose 33 percent year-on-year to Rs 54.13 crore in the year ended March 31, 2012. Total income increased 22.5 percent year on year to Rs 1,401.05 crore during the same year.

Currently promoter Rajeev Sheth holds 73.15 percent stake in the company while Fabrikant HK Trading Limited and Crystalon Finanz AG hold 16.36 percent and 9.09 percent stake, respectively.

Enam Securities Private Limited and ICICI Securities Limited are book running lead managers to the issue.

Recommendation:

CARE has assigned grade 3 to the IPO indicating average fundamentals. We would not recommend investors to invest in this IPO at this time as it is priced expensive and even if there are some listing gains they will be very moderate and not worth the risk and investment.

Subscription:

The company has already raised USD 7.4 million in pre-IPO placement from Swarovski. The jewelry retailer received good response from anchor investors' portion which had opened for only for a day on 20th November. Universities Superannuation Scheme Limited (USSL) as trustee of Universities Superannuation Scheme and D B International Asia Ltd have received 4.35 lakh shares and 7,23,945 of the company at higher end of price band of Rs 230. Total amount collected by the company was Rs 26.65 crore through anchor investors.

After a poor start, Tara Jewels IPO managed to get 1.98 times subscription due to last day rush. At the close of the IPO,

QII segment got subscribed by 1.49 times
NII segment got subscribed by 3.1 times
Retail segment got subscribed by 2.05 times
Employee segment got subscribed by 0.14 times

Allotment:

Click here to check Tara Jewels IPO Allotment status!

Listing:

Tara Jewels IPO got listed on 6 December, 2012. The stock opened at Rs 242, rallied to an intra-day high of Rs 244.90 before closing at lower circuit of Rs 229.95 on the BSE, against the issue price of Rs 230 a share.


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