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• Manoj Jewellers is coming out with an initial public offering (IPO) of 30,00,000 equity shares of face value of Rs 10 each for cash at a fixed price of Rs 54 per equity share.
• The issue will open on May 5, 2025 and will close on May 7, 2025.
• The shares will be listed on SME Platform of BSE.
• The share is priced 5.40 times higher to its face value of Rs 10. 
• Book running lead manager to the issue is Jawa Capital Services.
• Compliance Officer for the issue is Vaneeta Khanna.

Profile of the company

Manoj Jewellers is engaged in the retail and wholesale business of jewellery and ornaments made from gold and diamonds, embellished with precious and semiprecious stones. The company’s extensive portfolio includes a wide range of items such as rings, earrings, armlets, pendants, gajrahs, nose rings, bracelets, chains, necklaces, bangles, and other wedding jewellery pieces. The company’s diverse collection caters to various tastes and occasions, offering customers a selection of exquisite pieces to choose from. It aims to provide high-quality and beautifully crafted jewellery to meet the needs and preferences of its clientele.

The company's dedication is to maintain high-quality products through strict quality control procedures, timely delivery, and competitive pricing. The company also emphasizes on offering a variety of regular designs and ensuring on-time delivery to its valued customers. Additionally, it goes to extra mile by getting its jewellery hallmarked by a BIS recognized Assaying and Hallmarking Centre. BIS hallmark serves as a mark of conformity widely accepted by consumers, providing them with added confidence in the purity of the company's gold jewellery. Overall, these practices demonstrate the company's commitment to quality, customer satisfaction, and transparency in their operations.

Proceed is being used for:

• Repayment/ prepayment of certain borrowings availed by the company
• General corporate purposes

Industry Overview

India is the second largest jewellery market. The gold market forms a deeply intrinsic part of India. For the population of 1.4 billion, gold, and specifically gold jewellery, plays a central role, acting both as an adornment and a form of investment. It is therefore not surprising that for decades India was the largest consumer of gold before being overtaken by China in 2009. In 2021, India bought 611 tonnes of gold jewellery, second only to China (673 tonnes) but comfortably ahead of all other gold-consuming markets. Much of the Indian gold market is very traditional, reflecting important cultural and religious ties. This can be seen in the long-standing preference for 22-carat jewellery and the dominance of bridal jewellery. But the gold market is evolving, with changing tastes and designs driven by economic growth, globalisation and changing consumer preferences. In recent years, for example, demand has grown for lightweight and studded jewellery.

Overall, the Indian market will continue to evolve as the younger generation drives trends and as organised retailers gain market share. Retailers are trying to tap into the sizeable young population by offering products that suit their tastes and budget. It has made it adjust not just its product offerings, but also how it does business and interact with consumers. While the South dominates the landscape, changes have emerged within the region. In particular, gold demand in Andhra Pradesh and Telangana has superseded other Southern states due to the inflow of investment since the state of Andhra Pradesh was sub-divided and Telangana was created. A robust policy framework and a good response mechanism have helped encourage investment in these two states.

On the other hand, demand in Kerala has been negatively impacted due to the slowdown in the Gulf during the COVID19 pandemic. Southern India’s gold market is dominated by plain 22-carat gold jewellery, although demand for 18-carat diamond pieces has increased in recent years driven by younger consumers who are more open to buying diamondset products. North and West India enjoy 20%26 and 25%27 of market share respectively. In contrast, Eastern India has a market share of just 15%. The Northern and Western markets are quite diverse, with a preference for 23, 22, 18 and 14 carat items. Unlike the South and West, the Eastern part of the country remains economically underdeveloped due to a lack of connectivity and difficult terrain. However, during the last few years the government has focused on developing the North-East, a policy that will likely result in a rise of market share in this region. 

Pros and strengths

Wide product range: The company’s wide range of product offerings caters to diverse customer segments, from the value market to high-end customized jewellery. Its product profile includes traditional, contemporary and combination designs across jewellery lines, usages and price points. The gold and diamond jewellery inventory in its showroom reflects regional customer preferences and designs. Its focus on design and innovation, its ability to recognize consumer preferences and market trends, the intricacy of its designs and the quality and finish of its products are its key strengths. In addition, its access to a wide range of independent manufacturers from various parts of India allows it to offer a diverse product range.

Customer satisfaction: The company makes mutually beneficial relationship with its customers by providing them optimum quality jewellery pieces at highly affordable market prices. In a zest to attain maximum customer satisfaction, it assures accurate and timely delivery of these jewelleries, at the customer’s end. Its strength lies in understanding the requirement of the customer and its execution capabilities this enables it to attract new customers. The intricacies of its designs and quality of its products finish enable it to get better margins on its products.

Quality assurance: It endeavours to maintain the quality of its products, follow strict procedures to ensure control quality, timely delivery and competitive prices. It offers regular designs and guarantee its esteemed customers for the time bound delivery of the products. It gets the jewellery hallmarked from BIS recognized Assaying and Hallmarking Centre for its customers. The BIS hallmark, a mark of conformity widely accepted by the consumer bestow the additional confidence to the consumer on the purity of its gold jewellery.

Risks and concerns

Income and sales are subject to seasonal fluctuations: The company operates in an industry that is driven by fluctuation seasonal fluctuations. Its sales peak during festival/wedding seasons and on occasions such as Akshay Tritiya, Dhanteras, Diwali, wedding season, etc. While it stocks certain inventory to account for this seasonality, its fixed costs such as lease rentals, employee salaries, showroom operating costs and logistics-related expenses, which form a significant portion of operating costs, are relatively constant throughout the year. Consequently, lower than expected net sales during the third or fourth quarters of the fiscal year or more pronounced seasonal variations in sales in the future could have a disproportionate impact on its operating results for the fiscal year, or could strain its resources and impair its cash flows.

Geographical constrain: Its Showrooms are located in Chennai, Tamil Nadu. It essentially carries its business operations, including procuring of raw material and sale of its products, in the state of Tamil Nadu only. This reliance on specific operating location heightens its exposure to adverse developments related to economic and demographic changes in this region, which may adversely affect its business prospects, financial conditions and results of operations. While it strives to maintain a stable supply chain, various factors - such as economic fluctuations, regulatory changes, or natural disruptions impacting the state of Tamil Nadu, could impact its procurement process. As such, there may be potential risks that could affect availability and pricing of the raw materials required by it.

Dependent upon few suppliers for supply of its products: For the nine months period ended December 31, 2024 and for the financial years ended on March 31, 2024, 2023 and 2022, its top 10 suppliers contributed around 82.61%, 70.03%, 46.38%, and 90.77% respectively and top 5 suppliers contributed around 74.80%, 64.82%, 38.24%, and 72.97%, respectively of its purchases. In the event of a delay, inadequacy or default in deliveries by any of its vendors, it may not be able to source its products on an adequate and timely basis or on commercially acceptable terms. A major disruption to the timely and adequate supplies of products could adversely affect its business, results of operations and financial condition.

Outlook

Manoj Jewellers is engaged in the retail business of various jewellery and ornaments made out of gold and diamonds studded with precious and semiprecious stones. The company ensures product quality through strict procedures, timely delivery, and competitive prices. It offers regular designs, guarantees on-time delivery, and BIS hallmarked jewellery for customer confidence in purity. On the concern side, the operations of the company are located in the state of Tamil Nadu, any adverse developments affecting operations in this region could have a significant impact on its business, and results of operations. Moreover, its income and sales are subject to seasonal fluctuations and lower income in a peak season may have a disproportionate effect on its results of operations.

The company is coming out with an IPO of 30,00,000 equity shares of face value of Rs 10 each for cash at a fixed price of Rs 54 per equity share to mobilize Rs 16.20 crore. On performance front, the company’s total income increased by 218.18% from Rs 1363.52 lakh for the Financial Year ended March 31, 2023 to Rs 4338.42 lakh for the Financial Year ended March 31, 2024. This increase was primarily due to an increase in operating income i.e., sale of products, which comprise of domestic sales only. The company’s profit after tax increased by 421.92% from Rs 62.34 lakh in the Financial Year 2023 to 325.37 lakh in the Financial Year 2024.

The company intends to continue to add new design to its existing product portfolio to cater to various customer and price segments in the jewellery markets. It endeavours to maintain the quality of its products, and follow strict procedures to ensure quality control, timely delivery and competitive prices. The company intends to strengthen its product development effort by leveraging skills of its employees and focussing on changing trends in the designs of jewellery and customers demand, which will help to increase the sales of the company and retain customers.