Our internal team is BUSY with some other work and has a NEUTRAL View on the IPO of Shree Ganesh Jewellery House Ltd. However, we would not like to deny our readers the views of other Researchers and Analysts on the Street.
Shree Ganesh Jewellery House Limited (SGJHL) is one of the largest manufacturers and exporters of handcrafted gold jewellery in India. SGJHL products include handcrafted and hallmarked gold jewellery, gold enamelled jewellery and gold jewellery studded with precious stones. Its products are primarily exported to countries such as the UAE, Singapore and Hong Kong. SGJHL intends to raise in excess of Rs 3.71 bn and utilise the proceeds from the fresh issue of 12 mn shares to set up/expand its manufacturing facilities, to set up retail outlets and to meet the working capital requirement.
SGJHL has long standing relationship with customers in the Middle east, its key market, contributing over 48% to its revenues in FY09. As a result, the Company achieved revenue CAGR of 89% for FY07-09.
All of SGJHL’s manufacturing units are located at Manikanchan SEZ, which entitles it to direct and indirect taxation benefits and expeditious custom clearances. Moreover, it is able to procure highly skilled labour force at a very low cost in West Bengal enabling it to achieve superior net margins of ~5% compared to 2% for its peers.
