I THINK 90% customers purchase jewellery without BILL. then how the company will benefit the investors. Only promoters are to be benefited. We have seen other issues like, Goenka Diamond, Ganesh Jewellery etc. IGNORE the issue.....
TOTAL SALE IS 1100 CRORE AND COMPANY IS EARNING ONLY 4% (40 CRORE) IS IT POSSIBLE WHEN JEWELLERS EARN AROUND 30-40% ON SALE OF JEWELLERY (DIAMOND-MEENA-KUNDAN AND ON GOLD AROUND 10%) WE KNOW THAT THERE IS DO NUMBER KA KAAM IN JEWELLERY, WHY WE SHOULD INVEST THIS COMPANY ?
Tribhovandan Bhimji Zaveri (TBZ) is entering the primary market on 24th April 2012, with a fresh issue of Rs 1.67 crore equity shares of Rs.10 each, in the price band of Rs.120 to Rs.126 per share. The issue, aggregating to Rs. 210 crore at the upper end of price band, represents 25% of the post-issue share capital of the company, and closes on 26th April. Old habits die hard and even old memories don’t get erased easily. This seems to be the case with the promoters of this company as well. The company is presently operating 14 showrooms and wants to expand it to 57 showrooms, by the end of fiscal 2015. No harm in doing this, but why Rs.19 crore for new showrooms is being asked from the public? Why can’t this get mobilized from internal accruals? (P&L account balance of Rs. 109 crore as of 31- 12-11 and 9mFY12 cash profit of over Rs. 54 crore). Also, as usual, a hefty Rs.160 crore is estimated for working capital. So, nothing new in the objects of IPO! Moreover, if all the new showrooms are going to get opened in the next 3 years, why this IPO now? Presently the working capital situation of the company is not very comforting, with current ratio being as low as 1.08:1, on 31-3-10, which moderately rose to 1.15:1, on 31-3-11. As at 31-12-11, it has moved to 1.24:1. Still, lower than minimum prescribed ratio of 1.33:1 by the bankers. Inspite of high working capital nature of the business, showrooms are now being increased from 14 to 57. This will result in more working capital pressure on the company. Even the financial performance of the company has not been very encouraging. For FY10, EBITDA margin was meager at 5.36%. This rose to 7.31% for FY11 and to 9.26% for 9 months ending Dec. 11. Something to do with ensuing IPO? For 9 months ending December, 2011, total income was Rs. 1,118 crores, with PAT thereon at Rs. 50.31 crores, resulting in an EPS of Rs. 10 for the period. Due to high equity base of Rs.50 crores, (due to liberal bonus of 1:4 made in October 10) FY11 EPS was only Rs.8. Though one can’t extrapolate results of first 9 months of FY12, EPS for FY 12 can be taken at around Rs.13.50. This implies that share is issued at a PE multiple of 9.33 in primary market, at the upper band. Adding about 10% gain for prospective investors, post listing, it is issued at a PE of over 10 times, considering price discovery to happen at the upper band. As against this, Gitanjali Gems having an EPS of about Rs.60 for FY12, is ruling at Rs.330, at a PE of less than 6 times. This is despite Gitanjali Gems having an annual turnover of about Rs.12,000 crores against estimated revenue of Rs.1,500 crores of TBZ. Also, brand portfolio of Gitanjali is much wider and popular, with stronger domestic as well as global presence. In contrast, there are five third-parties who have right to use the words ‘Tribhovandas Bhimji Zaveri’ and are currently using similar names in cities of Mumbai, New Delhi, Bengaluru and Nagpur. Even Shrenuj, having an annual income of Rs.3,000 crores and EPS of close to Rs.10 for FY12, is ruling at Rs.67, at a PE of less than 7. Shrenuj is into diamond jewellery, where TBZ is trying to increase its share of income, in view of higher margins. In nutshell, the company has very high equity base, which is now at Rs.50 crores and will rise to Rs.68 crores, post-IPO. Share being issued at a PE of over 10 times (based on secondary market valuations), is valued very expensively. As such, jewellery stocks are not getting good valuation on the bourses (except Titan), as evident from the stock prices of other listed companies. Hence, issue is not likely to reward anything to the prospective investors and may rule in double digit after a month or so, after its listing. Hence, better to buy gold or diamond instead of shares of this company.
I am confident about it that- It will 100% give listing gain if qib subscription more then 3-4 times.since there is anchor investor less risk like eros international,lovable,tree house, mt edu. wait and see what happens.good luck every
Dear All, Pls find Issue Details : TBZ IPO Anchor Book Opens and closes : Monday, April 23, 2012 Issue opens for all categories: Tuesday, April 24, 2012 Issue Close for all categories: Thursday, April 26, 2012 Issue size: Total Issue of Rs. 2.00 bn to Rs 2.10 bn Price Band: Rs. 120 to Rs. 126 per equity share Application lot size: 45 shares Total # of shares issued at the above price band: 16,666,667 Dilution at the above price band: 25% Max no of Anchor Shares: 2,499,999 shares QIBs portion: Not more than 8,333,332 shares (of which 291,667 shares i.e. 5% of QIB portion is available for allocation on a proportionate basis to Mutual Funds only and the remainder i.e. 5,541,666 shares is available for allocation on a proportionate basis to all QIBs, including Mutual Funds) Post issue number of shares: 66,666,667 shares Post Money Valuation at the above price band: Rs. 8.0 bn (USD 154 mn) at Rs. 120 / Rs. 8.4 bn (USD 162 mn) at Rs. 126 BRLMs: IDFC Capital and Avendus Capital Registrar : Karvy Computershare Maximum number of shares that can be applied for by MUTUAL FUNDS: 6,666,660 shares (10% of Post Issue Share Capital, as adjusted for the lot size) Maximum number of shares that can be applied for by each FII & sub account: 6,666,660 shares (10% of Post Issue Share Capital, as adjusted for the lot size) Maximum number of shares that can be applied by FII investing on behalf of its sub account which is a foreign corporate or an individual: 3,333,330 shares (5% of Post Issue Shares, adjusted to lot size) Maximum number of shares that can be applied for by QIBs OTHER than MUTUAL FUNDS, Insurance co’s & FIIs as mentioned above: Total issue of 16,666,650 shares, as adjusted for the lot size (but subject to investment limits prescribed for them by applicable laws and their internal regulations) Please Note : FVCIs, multilateral and bilateral financial institutions and QFIs are not permitted to participate in this Issue. No Non-Resident investor/ entity other than SEBI registered FIIs and Eligible NRIs can participate in this Issue. Thanks & Regards
TBZ is not a good IPO A Small Player Of Gold and diomand Jewellery 1192 Employee and Only 14 Show Room In 10 City India Invest Gitanjali Gems, Tanishq and many good company Will be a High Price Band IPO Justify Not A True Value IPO For Retail Investor Advice For Retail Investor Just Avoid From this IPO
Mumbai based 145-year old jewellery retailer Tribhovandas Bhimji Zaveri is tapping the capital market with its public issue of more than 1.66 crore equity shares on April 24, diluting 25% stake, as per the advertisement in The Financial Express.
The company has 14 showrooms in nine cities across five states and it primarily sells gold jewellery and diamond-studded jewellery.
Jewellery retailer plans to open an additional 44 showrooms (26 large format high street showrooms and 18 small format high street showrooms) by the end of fiscal 2014, which will be financed by IPO money (with an outlay of Rs 18.17 crore). The company will also use issue proceeds for working capital (of Rs 156.5 crore).
The issue will be closed for subscription on April 26. Rating agency CRISIL has assigned grade 3 to the IPO, which indicates average fundamentals.
Equity shares are proposed to be listed on the BSE and the National Stock Exchange.
The book running lead managers to the issue are IDFC Capital Limited and Avendus Capital Private Limited. Karvy Computershare Private Limited is the registrar to the issue.