As an investor, it can be very challenging to decide whether the PNGS Reva Diamond IPO is a good or bad investment. Not anymore. On this blog, we will provide you with all the necessary details related to the PNGS Reva Diamond IPO to help you decide whether to apply or not. Read on to know the IPO risks, strengths, valuation, financial details, and expert opinion to make your investment decision better.Ā
Strengths:
- PNGS Reva Diamond operates 34 stores divided into 3 types: FOCO, FOFO, and COCO, making the expansion flexible.
- The brand Reva Diamond is growing on legacy, industry knowledge, relationships with promoters, and customer trust.
- The firm has a strong regional presence across Tier-1, Tier-2, and Tier-3 cities.
- A diversified range of high-quality products in the portfolio includes Rings, bracelets, bangles, Chains, Nose pins, Pendants, Earrings, Mangalsutras, Necklaces, etc, at different price points.
- The IPO is a fresh issue, meaning the funds will be used for the company’s expansion and growth.
Weaknesses:Ā
- The 97% of the firm’s revenue comes from the stores in Maharashtra, meaning if any issue occurs in this region, it can disrupt the companyās financials, performance, and financial health.Ā
- PNGS Reva Diamondās brand reputation is dependent on Corporate Promoter, P. N. Gadgil & Sons Limited. If their brand image is damaged, it can adversely affect the business, reduce customer visits, and revenue.Ā
- Over natural diamonds or gemstones, Lab-grown and synthetic diamonds are receiving more popularity due to their low cost and accessibility. If not able to compete with the prices of synthetic diamonds, can impact the companyās sales and revenue.
- Failing to market its products correctly will reduce the customers’ visits to stores, which can negatively affect the business, cash flow, and financial condition.Ā
PNGS Reva Diamond IPO ReviewĀ
| Reviewer | Reccomendation |
| IPO Watch | May Apply |
| Adroit Financial Services | Apply |
| Lakshmishree Investment & Securities | Apply |
| Axis Capital | Not Rated |
| Marwadi Shares and Finance | Apply |
| SBICAP Securities | Not Rated |
Peer Comparison with the Company
| Name of the Company | Face Value(ā¹) | Basic EPS (ā¹) | Diluted EPS | RONW (%) | P/E Ratio | NAV(ā¹) |
| PNGS Reva Diamond | 10 | 35.21 | 35.21 | 59.36% | 10.96 | 45.82 |
| Peer Groups | ||||||
| Tribhovandas Bhimji Zaveri Limited | 10 | 10.25 | 10.25 | 10.41% | 15.74 | 98.49 |
| Thangamayil Jewellery Limited | 10 | 42.00 | 42.00 | 10.77% | 80.96 | 390.03 |
| Senco Gold Limited | 10 | 10.09 | 10.08 | 8.09% | 33.00 | 120.37 |
Industry peer group P/E ratioĀ
In the retail jewellery industry, the P/E ratio ranges from a low of 15.74 to a high of 80.96, with an average of 43.23.
Promoters & Track Records, if anyĀ
- Govind Vishwanath Gadgil, aged 66 years, is the Chairman, Non-Executive Director, and the Promoter of the Company. He holds 6,975,000 Equity shares, representing 31.90% of the pre-issue equity share capital.
- Renu Govind Gadgil, aged 64 years, is the Promoter of the Company. She holds 6,975,000 Equity shares, representing 31.90% of the pre-issue equity share capital.
- P. N. Gadgil & Sons Limited is the corporate promoter of PNGS Reva Diamond Jewellery. It holds 4,207,500 equity shares, representing 19.24% of the pre-issue equity share capital.
Expansion
- Out of the total, the fund of ā¹286.56 from the fresh issue will be utilized to set up 15 new stores.Ā
- The fund of ā¹35.40 crore will be used towards the Marketing and promotional expenses of launching 15 new stores, to increase the brand awareness and make people more aware.Ā
- Lastly, the remaining funds will be used for the general corporate purposes.
PNGS Reva Diamond IPO – Should You Apply or Not?
Established jewellery brand, PNGS Reva Diamond, makes modern diamond, gold, and platinum jewellery designs, opening for subscription on 24th February. The firm operates its business with a trusted legacy of P. N. Gadgil & Sons (PNGS), which has more than 190 years in the gems and jewellery sector. The company is competing with some major brands like Titan, Kalyan, and regional jewellers. Financially, in FY25, the revenue from operations increased to ā¹259.11 crores from ā¹196.24 crores in FY24. After experiencing a decline in EBITDA and PAT in FY24, the firm made a strong comeback in FY25, reporting EBITDA of ā¹79.61 crore and PAT of ā¹59.47 crore. However, the Debt to Equity ratio has increased by 1.10 in the last 6 months of FY25.
The PNGS Reva Diamond P/E ratio is 10.96. After comparing to the industry peer group P/E, the company appears to be fairly valued. As of 23rd February, the PNGS Reva Diamond IPO GMP is ā¹18, showcasing a listing gain of around 4-5%.
To sum up, the attractive valuations, promising growth plans, improving financial track record, and strong parentage of P.N. Gadgil indicate reasonable listing gains. However, some risks like high geographic concentration, volatility in gold and diamond prices, and dependence on only physical stores should not be avoided by investors.
If the overall market sentiment and GMP stay in support, then investors can subscribe for the IPO for short-term gains. While cautious investors must analyze the risks associated with companies, such as high debt levels and high inventory funding, before subscribing.
Please note:
Investors are advised to make their own decisions and apply entirely at their own risk. This article is written using information from the companyās RHP (Red Herring Prospectus) data and online sources. If you have any queries, kindly contact the IPO Watch Team.
