Peers of RBZ Jewellers Limited IPO

RBZ Jewellers Limited demonstrates a RoNW of 24.15%, while its peers, such as Titan Company Limited, show a higher RoNW at 27.50%. Additionally, RBZ Jewellers has a P/E ratio of 13.45%, which is comparatively lower than Titan Company Limited's higher P/E ratio of 93.06%.

Name of the Company	Face value (Rs. per share)	RoNW	P/ E	EPS (Basic) (Rs.)
RBZ Jewellers Limited	10	24.15	13.45	7.44
Thangamayil Jewellery Ltd	10	20.50	24.78	58.13
D P Abhushan Limited	10	25.02	28.46	20.33
Titan Company Limited	1	27.50	93.06	36.61
Ashapuri Gold Ornament Limited	10	2.16	14.96	0.71
Sky Gold Limited	10	18.96	49.46	17.32
Kalyan Jewellers India Limited	10	11.88	78.33	4.20
Senco Gold Limited	10	13.04	32.50	22.87

 

Evaluation

The IPO is priced in the range of Rs 95 to Rs. 100 per share.

 

Evaluation of P/E Ratio:

- Considering the FY23 EPS of Rs 7.44 from the last year, the resulting P/E ratio is 13.45x.

- Taking into account the weighted EPS of Rs 5.84 for the last three years, the P/E ratio amounts to 17.13x.

 

Comparative Analysis with Listed Peers

- Titan Company Limited has a P/E ratio of 93.06x (the highest).

- Ashapuri Gold Ornament Limited has a P/E ratio of 16x (the lowest).

- The industry's average P/E is 45.94x.

 

Therefore, the IPO Price range at a P/E of 13.45x to 17.13x is considered slightly overvalued.

 

Dividend Policy

No dividends were declared in the last three years, and the Board may retain earnings for long-term stakeholder value, using different payment methods. Interim dividends can be declared between annual general meetings as required.

 

 

IPO's Strengths

1. Efficient Manufacturing Setup: The integrated manufacturing facility, equipped with advanced technology, ensures streamlined operations, quality control, and cost-effectiveness.

 2. Extensive Client Base: Operating in 20 states and 72 cities, strong ties with national and regional retailers, including Titan Company Ltd. and Malabar Gold Pvt. Ltd., provide insights into diverse customer preferences and market trends.

 3. Innovation in Design: Their commitment to unique jewelry designs, facilitated by an in-house design team and skilled artisans, enables catering to different age groups and customer preferences across various price points.

 4. Reputed Brand: Holding approximately 1% of India's organized wholesale gold jewelry market, they've earned recognition and awards for quality and design, focusing on trust, transparency, and innovation.

 5. Effective Systems and Procedures: Rigorous systems govern order management, quality control, and risk mitigation. Adherence to hallmarking processes and ethical business practices enhances transparency and accountability.

 6. Experienced Leadership: Promoters Rajendrakumar Kantilal Zaveri and Harit Rajendrakumar Zaveri bring over 35 and 17 years of jewelry industry experience, fostering significant growth and strong relationships.

7. Experienced Board and Management Team: Supported by experienced independent directors, the Board and management ensure strategic planning and effective operations, contributing to overall success.

IPO's Weaknesses

1. Data Security Risks: Potential failure to secure customer data may disrupt operations and harm reputation, especially concerning credit card and personal information collected at retail showrooms.

2. Intense Market Competition: Competing with both organized and local jewellers requires continuous efforts in branding, product range, and customer service. Established trust by competitors in local markets poses challenges.

3. Financial Exposure from Guarantees: Personal guarantees for loan facilities by Promoters and the Promoter Group expose the company to financial risks. Invocation may necessitate alternative guarantees, impacting financial conditions.

4. Dependency on Gold Prices: Heavy reliance on gold makes the company vulnerable to price fluctuations influenced by various factors, affecting customer demand and overall financial health.

5. Hedging Vulnerabilities: Lack of specific hedging policies for gold inventory increases susceptibility to losses from gold price fluctuations, posing risks to financial conditions.

6. Currency and Export Risks: Exposure to U.S. dollar rates and potential increases in raw material costs due to unfavourable currency exchange rates may impact sales and operations.

7. Market Surveillance Measures: Post-listing, the company may face surveillance measures like ASM and GSM, leading to increased volatility, low trading volumes, and trading restrictions, impacting market price and liquidity of equity shares.

 

IPO GMP Today

The Latest GMP of RBZ Jewellers Limited IPO is Rs.0

 

Conclusion

RBZ Jewellers Limited, a leading name in Indian gold jewellery, is launching its IPO from December 19 to 21, 2023, aiming to raise Rs. 100 crore. Specialising in antique designs, the IPO offers 1,00,00,000 equity shares at Rs. 95 to Rs. 100 per share. The funds will support working capital and general corporate needs. Despite strengths, challenges include data security risks and market competition. Investors should assess carefully. The IPO listed on BSE and NSE on December 27, 2023.

 

 

Finowings IPO Analysis

Hope you enjoyed the Finowings IPO Analysis. We tried our best to give every required detail about the company that you should know before applying to the IPO. 

You must consult your financial advisor before making any financial decisions. 

To Apply for the IPO, Click Here.

 

To Read the Prospectus of the Company Click Here to Download the DRHP.

 

 

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