Jewellery-maker Senco Gold mulls raising ₹700-800 crore through IPO

Kolkata-based jewellery retailer Senco Gold & Diamonds is looking to tap the capital market through an IPO.

The plan is still on the drawing board stage and the company will take a decision in this regard by the beginning of next fiscal, Suvankar Sen, Executive Director, Senco Gold & Diamonds, told BusinessLine .

Senco Gold would require capital to the tune of ₹700-800 crore to fund its growth and expansion over the next two-to-three years.

“We have been discussing about going for an IPO in our board meetings. We will closely observe our financial performance this fiscal and post March 2018 we will take up this (IPO) matter,” he said.

The company had, in 2014, raised close to ₹80 crore from private equity firm SAIF Partners. The promoter currently holds 80 per cent while the rest 20 per cent is held by SAIF.

In FY17, Senco Gold posted 25 per cent growth in turnover to ₹1,840 crore. The company expects its turnover to increase to ₹2,000 crore by end FY18. Exports currently account for 8-10 per cent of its total turnover.

Senco Gold has 87 stores that include both company-owned and franchisee outlets. It plans to add 70 stores in the next two-to-three years. According to Sen, each store entails an investment of close to ₹12 crore.

Nearly 90 per cent of its stores have achieved breakeven, he said, adding that typically it takes around one to two years for a store to achieve breakeven.

North India is its second-largest market after East, he said. Of the 70-odd stores, 25-30 are likely to come up in Uttar Pradesh, Punjab, Haryana and Himachal Pradesh.

While IPO would be the preferred choice for raising funds, if that does not fructify, the company might consider going in for a second round of PE funding and bank credit to fund its growth needs.

“PE came in 2014, they need an exit option. IPO will be a preferred choice. But if IPO does not work then we will look for second round of PE funding and bank credit,” he said.