Kenvi Jewels BSE SME IPO Review (Avoid)

Review By Dilip Davda on Jan 29, 2018

Kenvi Jewels Ltd. (KJL) originally incorporated as Suvarnkrupa Ornaments Pvt. Ltd. rechristened to current name in August 2017. It is primarily into the business of manufacturing and retailing of jewellery. Besides this, KJL is also into wholesaling and trading of gold jewellery. The designing of its jewellery is done in house which is manufactured at its unit situated at Manek Chowk. Further, the company also gets jewellery designed by third party designers as and when required. It sells gold jewellery made with or without studded diamonds, precious and semi-precious stones. KJL’s product portfolio includes Wedding Jewellery, Festive Jewellery, Rings, Chain, Earrings, Ear Chain, Nose-rings/Nose pins, Waist belts, Mangalsutra, Anklet, Zuda, Toe Ring, Pendant Set/ Pendant, Bracelet and Bangles.

To part finance its working capital and general corpus fund needs, KJL is coming out with a maiden IPO of 1860000 equity shares of Rs. 10 each at a fixed price of Rs. 36 per share to mobilize Rs. 6.70 crore. Issue opens for subscription on 02.02.18 and will close on 07.02.18. Minimum application is to be made for 3000 shares and in multiples thereon, thereafter. Post allotment, shares will be listed on BSE SME. Issue constitutes 39.55% of the post issue paid up capital of the company. Issue is solely lead managed by First Overseas Capital Ltd. and Karvy Computershare Pvt.Ltd. is the registrar to the issue. Average cost of acquisitions of shares by the promoters is Rs. 12.71 and Rs. 19.44 per share. Having issued initial equity at par, it raised further equity in the price range of Rs. 20 and Rs. 50 between March 2014 and November 2017. It has also issued bonus shares in the ratio of 3 for 2 on 18.11.17. Post issue, its current paid up equity capital of Rs. 2.84 crore will stand enhanced to Rs. 4.70 crore.

On performance front, KJL has posted turnover/net profits of Rs.2.90 cr. / Rs. 0.001 cr. (FY15), Rs.7.05 cr. / Rs. 0.001 cr. (FY16) and Rs. 7.18 cr. / Rs. 0.02 cr. (FY17). For first eight months ended on 30.11.17 it has reported net profit of Rs. 0.54 cr. on a turnover of Rs. 7.47 cr. which is very surprising. For last three fiscals it has posted an average EPS of Rs. 1.25 and an average RoNW of 5.56% on an equity base of Rs. 0.12 crore. Issue is priced at a P/BV of 1.17 on the basis of its NAV of Rs. 30.87 as on 30.11.17 and at a P/BV of 1.35 on the basis of post issue NAV of Rs. 26.68. If we annualize latest earnings and attribute it to fully diluted post issue equity then asking price is at a P/E of around 21 against nearest peer Swarnsarita trading at a P/E of around 11 and mega brands like PC Jewellers and Titan trading at a P/E of 32 and 70 respectively. However, this offer appears priced aggressively with has poor track record till last fiscal. Sudden jump in top and bottom lines appears as window dressing before IPO.

On merchant banker’s front, this is the 17th mandate from its stable and out of last 10 listings, 5 opened at discount, 1 at par and the rest with a premium ranging from 1 to 13% on the day of listings.


Conclusion / Investment Strategy

Company’s track record is not supporting to asking price, Its equity is having quantum jump and aggressive pricing makes this offer a costly bet. No harm in giving it a miss.

Reviewer recommends Avoid to the issue.

Review By Dilip Davda on Jan 29, 2018

Review Author

DISCLAIMER: No financial information whatsoever published anywhere here should be construed as an offer to buy or sell securities, or as advice to do so in any way whatsoever. All matter published here is purely for educational and information purposes only and under no circumstances should be used for making investment decisions. Readers must consult a qualified financial advisor before making any actual investment decisions, based on information published here. With entry barriers, SEBI wants only well-informed investors to participate in such offers. With crazy listings in the past, SME IPOs drew the attention of investors across the board. However, as SME issues have entry barriers and continued low preference from the broking community, any reader taking decisions based on any information published here does so entirely at own risk. The above information is based on information available as on date coupled with market perceptions. The Author has no plans to invest in this offer.

(SEBI registered Research Analyst-Mumbai).


About Dilip Davda

Dilip Davda

Dilip Davda is veteran journalist associated with stock market since 1978. He is contributing to print and electronic media on stock markets/insurance/finance since 1985.

Dilip Davda is a leading reviewer of public issues and NCDs in the primary stock market in India. The knowledge he gained over 3 decades while working in the stock market and a strong relationship with popular lead managers makes his reviews unique. His detail fundamental and financial analysis of companies coming up with IPO helps investors in the primary stock market. Dilip Davda has a special interest in analyzing the SME companies and writing reviews about their public issues. His reviews are regularly published online and in news papers.

Email: dilip_davda@rediffmail.com

Kenvi Jewels IPO FAQs

  1. 1. Why Kenvi Jewels IPO?

    The initial public offer (IPO) of Kenvi Jewels Limited offers an early investment opportunity in Kenvi Jewels Limited. A stock market investor can buy Kenvi Jewels IPO shares by applying in IPO before Kenvi Jewels Limited shares get listed at the stock exchanges. An investor could invest in Kenvi Jewels IPO for short term listing gain or a long term.

  2. 2. How is Kenvi Jewels IPO?

    Read the Kenvi Jewels IPO recommendations by the leading analyst and leading stock brokers.

  3. 3. Kenvi Jewels IPO what should investors do?

    Kenvi Jewels IPO offers an opportunity to buy IPO shares before they get listed at the stock exchanges. Read the Kenvi Jewels IPO Notes, Analysis and Recommendations by leading stock brokerage firms and experts in the above answer.

  4. 4. Is Kenvi Jewels IPO good?

    Our recommendation for Kenvi Jewels IPO is to avoid.

  5. 5. Is Kenvi Jewels IPO worth Investing?

    As per the analysis by our lead analyst Mr. Dilip Davda, we suggest you to avoid the Kenvi Jewels IPO.

  6. 6. When will Kenvi Jewels IPO allotment status?

    The Kenvi Jewels IPO allotment status will be available on or around Feb 12, 2018. The allotted shares will be credited in demat account by Feb 14, 2018. Visit Kenvi Jewels IPO allotment status to check.

  7. 7. When will Kenvi Jewels IPO list?

    The Kenvi Jewels IPO will list on Friday, February 16, 2018, at BSE SME.








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