Prices of gold and other precious metals have been swinging sharply this year, creating uncertainty for the jewellery industry.
Amid this volatility, PNGS Reva Diamond Jewellery has launched its ₹380 crore IPO today.
The issue is entirely a fresh offering of 98 lakh shares, and the company plans to use the funds to expand its presence across India.
Interestingly, the stock is already trading at a small premium in the unlisted market, and the QIB (Qualified Institutional Buyers) segment has shown steady interest so far.
Here’s a simple breakdown of what investors should know.
Price Band, Dates and Listing Details
The IPO price band has been fixed at ₹367 to ₹386 per share.
The issue opened today and will close on February 26. Share allotment is expected on February 27.
Shares are likely to be credited to demat accounts by March 2, and the company is expected to list on stock exchanges on March 4.
For retail investors, the minimum lot size is 32 shares.
At the upper price band, this means a minimum investment of ₹12,352.
How Is the IPO Being Subscribed?
As of early afternoon on Day 1, the IPO was subscribed 0.38 times overall.
The employee quota has seen the strongest demand, getting oversubscribed 2.84 times.
The QIB category has been subscribed 0.58 times. Meanwhile, retail investors have subscribed 0.27 times, and the NII category has seen relatively lower interest so far.
In the grey market, shares are trading at around ₹392 — about ₹6 above the upper price band.
However, grey market premium (GMP) is unofficial and can change quickly depending on market sentiment.
How Will the Company Use the Money?
Out of the ₹380 crore being raised:
Around ₹286 crore will be used to open 15 new stores across India.
Over ₹35 crore will go towards marketing and brand promotion.
The remaining amount will be used for general corporate purposes.
The company is clearly focusing on expanding its retail footprint and strengthening its brand presence.
Key Risks Investors Should Consider
While the expansion plan looks ambitious, there are some risks.
More than 95% of the company’s revenue in the past three years has come from Maharashtra.
This heavy dependence on one state makes it vulnerable to regional slowdowns.
The business is also sensitive to fluctuations in gold and diamond prices.
Changes in regulations, competition from other jewellery brands, and growing customer interest in lab-grown diamonds could also impact performance.
Additionally, the company relies heavily on its ‘Reva’ brand and its promoter.
Any reputational issues could affect business.
The Bottom Line
PNGS Reva Diamond Jewellery is entering the market at a time when precious metal prices are highly volatile.
The IPO offers growth potential through store expansion, but investors should carefully weigh the risks before making a decision.
As always, understanding both the opportunity and the challenges is key before applying for any IPO.
