Last updated on May 29, 2023
Every once in a while, investors are presented with opportunities which are hard to miss. One such instance took place last month and lucky investors in this multibagger SME IPO have reaped impressive returns. This is despite the fact that jewellery stocks are not really known as wealth creators and performance of most listed companies in this space is a proof of this phenomenon.
The stock we are talking about is PNGS Gargi Fashion Jewellery which concluded its successful IPO last month. PNGS Gargi Fashion Jewellery is a subsidiary of Pune-based jeweller P N Gadgil & Sons and operates in artificial jewellery segment.
Multibagger SME IPO: From Unlikely Sector
PNGS Gargi debuted on stock market on 20 December 2022 with massive gains of 90% from IPO price of INR 100 per share. The INR 7.80 crore IPO was quite successful as investors lined up and oversubscription stood at 218.86 times on the final day of bidding. The company sold shares at the price of INR 30 per share.
Following the successful listing, the stock has been locked in upper circuits on all the subsequent days. Interestingly, volumes have come down in the stock and on some days, it has got locked in circuit limits with trading of just one or two lots. Shares are traded in multiples of 4,000 units. As on the date of writing this article, the stock had pending buy orders of 2,24,000 shares with no sellers and the last traded price being INR 149.65 per share. The stock price has become 5X in last month, indicating a whopping gain of nearly 400% for IPO investors.
The interest in multibagger SME IPO stock is warranted, primarily on two accounts – being a subsidiary of an established and well-known parent and operating in affordable segment.
Since artificial jewellery is affordable, it gives buyers the liberty to experiment with changing fashions and flaunt the latest styles. This trend facilitates high volumes for jewellers as users tend to buy everything, including jewellery to match their outfits.
Its parent P N Gadgil and Sons is among the oldest jewellers in Pune and currently has 29 stores in Maharasthra, Gujarat and Karnataka.
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High Growth Trajectory
PNGS Gargi’s numbers do the rest of the talking. The company launched its operations through shop in shop model in FY 2020 and registered sales of nearly INR 6 crore in FY 2022. In the six months of FY 2023, sales neared INR 12 crore. These topline figures were also supplemented by corresponding growth in bottomline.
Going forward, the company aims to reach annual turnover of INR 100 crore in the next 5 years. Majority of this growth is likely to be fuelled from offline stores and online sales are expected to account for only 25%.
As it happens, competition is likely to catch up in this segment and erode margins but for now, this multibagger SME IPO from jewellery sector has caught investors’ attention.
