Senco Gold IPO: What GMP signals ahead of subscription tomorrow?

economictimes.indiatimes.com:

Ahead of subscription opening, the company's shares are commanding a premium of Rs 125-126 in the unlisted market. The IPO is a combination of fresh issue and OFS portion. The fresh equity issue is Rs 270 crore and the OFS segment aggregates up to Rs 135 crore.

Of the fresh issue net proceeds, Rs 196 crore will be utilised for funding working capital and residual for other general corporate purposes. About 50% of the net offer is reserved for the QIB portion, 15% for the NII category, and 35% for the retail portion. Investors can bid for a minimum of 47 shares and in multiples thereafter.

The company has a retail network of 136 showrooms, including 61 franchise and rest 75 company-owned showrooms. It follows a mix of its own store as well as an asset-light franchise route for expansion. Senco Gold also boasts of an experienced management team and strong institutional investor support of SAIF Partners India IV, who has been invested in the company since 2014.

The company has a strong financial track record with consistent dividends and robust return ratios, according to analysts. It has crossed sales of over Rs 4000 crore in FY23 with a return ratio ROE of 18.9% and ROCE of 14.2% at the end of the last fiscal. The net proceeds from the issue will be used for funding the working capital requirements of the company and other general corporate purposes.IIFL Securities, Ambit, and SBI Capital Markets are book-running lead managers to the issue, while KFin Technologies is the registrar.