Kolkata's Senco Gold Plans to File Papers for INR 400 Crore IPO

Kolkata-based jewellery company Senco Gold is planning to file papers with the Securities and Exchange Board of India (SEBI) for an initial public offering (IPO) worth Rs 400 crore, according to a source familiar with the matter. This will be the company's third attempt to go public, having previously filed for IPOs worth Rs 525 crore in 2022 and Rs 600 crore in 2018.

The IPO will consist of a fresh issue of Rs 265 crore and an Offer For Sale (OFS) of Rs 135 crore. In an OFS, promoters sell their shares on the exchange bidding platform to reduce their holdings in a transparent manner. The funds raised from the IPO will be utilized to meet working capital requirements, expand the company's presence in north India, and grow its diamond jewellery business.

Senco Gold derives approximately 85 percent of its revenues from gold jewellery and around 10 percent from diamond jewellery, which is known for its high margins. The company aims to capitalize on this by strengthening its diamond jewellery segment.

The company has faced challenges in raising funds through the IPO route in the past, leading to a reduction in the size of the current offer. However, industry experts believe that Senco Gold's efforts to expand its operations beyond West Bengal and establish a pan-India presence have helped mitigate the risk associated with geographical concentration.

In the fiscal year 2022-23, Senco Gold reported revenue from operations of Rs 4,075.56 crore, an increase from Rs 3,534.64 crore in the previous fiscal year. The company's profit after tax also grew to Rs 160.91 crore from Rs 130.15 crore.

Senco Gold is primarily engaged in the manufacturing and sale of jewellery made from gold, diamond, silver, platinum, and precious and semi-precious stones. Its products are sold under the brand name "Senco Gold & Diamonds."

By going public, Senco Gold aims to access the capital markets and secure funding for its expansion plans, allowing it to further strengthen its position in the jewellery industry.