Motisons Jewellers IPO – Details, Dates, GMP, Analysis and Review

About Motisons Jewellers IPO

Motisons Jewellers sells gold, diamond and kundan jewellery as well as other jewellery products. It is coming up with IPO which would open for subscription on December 18 and closes on December 20, 2023. Motison’s Jewellers IPO Grey Market Premium is over 130%. Would this be a multibagger stock then? Check this article about complete info about Motisons Jewellers IPO.

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About Motisons Jewellers Limited:

Motisons Jewellers Limited, established in October 1997, is a jewelry business based in Jaipur, Rajasthan. The company specializes in selling a diverse range of jewelry, including gold, diamond, kundan, pearls, silver, platinum, and other metals. Their product offerings encompass traditional, modern, and combination designs suitable for various occasions such as weddings, celebrations, and everyday use. The jewelry is designed for all ages and genders, spanning different price ranges.

Motisons Jewellers boasts a vast selection of over 300,000 designs in gold, diamonds, and other materials, providing options for a wide customer base. The flagship store, Motisons Tower, located in Jaipur, offers a comprehensive selection of silver, gold, and diamond jewelry across three floors. Additionally, the company expanded its presence with a new branch in Vaishali Nagar, an affluent neighborhood in south western Jaipur, which opened in 2021.

Key competitive strengths of Motisons Jewellers include strategically located showrooms, a diversified product portfolio in terms of price range and category, and a heritage and experience spanning over two decades. The company also emphasizes efficient risk mitigation systems and procedures, contributing to its overall competitiveness in the jewelry market.

Motisons Jewellers IPO GMP - Details, Size and Review (1)

Motisons Jewellers IPO – Key Details

IPO Date IPO Opens on December 18, 2023 and closes on December 20, 2023
IPO Listing Date December 26, 2023
Issue Type Book Built Issue IPO
Face Value Rs 10 per equity share
IPO Price band Rs 52 to Rs 55 per equity share
Lot Size 250 Shares
Listing at BSE and NSE
Total Issue Size Rs. 151.09 Crores

Objectives of the IPO

Company intends to use the IPO proceeds for the following purposes:

  • Repayment of existing borrowings availed by the company from scheduled commercial banks.
  • Funding the working capital requirements of the Company and
  • General corporate purposes.

Motisons Jewellers Limited Financials

Financial Year ending / Period ending (Amt in Crores)
Period Ended 31-Mar-21 31-Mar-22 31-Mar-23 30-Jun-23
Assets 275.42 306.53 336.51 348.13
Revenue 213.06 314.47 366.81 86.76
Profit After Tax 9.67 14.75 22.20 5.48
Net Worth 100.96 115.45 137.40 142.81
Reserves and Surplus
Total Borrowing 141.43 151.60 164.54 166.03

Is Motisons Jewellers IPO over priced?

  • The IPO price band is Rs 52 to 55 per share
  • P/E Ratio Analysis
    • If we consider the last year FY23 EPS of Rs 3.42, the P/E ratio works out to be 16x
    • If we consider last 3 years weighted EPS of Rs 2.72, the P/E ratio works out to be 20x
  • Comparison with listed peers
    • Renaissance Global Limited trading at P/E 48x (Highest)
    • Thangamayil Jewellery Ltd is trading at P/E of 24x (Lowest)
  • Hence, the IPO Price band at P/E of 16x to 20x is attractively priced

Motisons Jewellers IPO GMP

The Grey Market Premium (GMP) for Motisons Jewellers IPO stands at Rs 75 per share, representing 136% of the upper price band of Rs 55. Nevertheless, GMP should be approached with caution due to its reliance on offline trades, and the accuracy of such transactions cannot be guaranteed.

Why to invest in Motisons Jewellers IPO?

Here are the positive factors of investing in the Motisons Jewellers Limited IPO:

#1 – Diverse Product Portfolio:

  • Sale of a wide range of jewelry, including gold, diamond, kundan, pearls, silver, platinum, and other metals.
  • Offerings also include gold and silver coins, utensils, and artifacts.
  • Over 300,000 jewelry designs catering to various preferences and price points.

#2 – Strategic Presence and Expansion:

  • Presence across multiple prominent locations in Jaipur, Rajasthan.
  • Four showrooms under the “Motisons” brand strategically located across the city.
  • Flagship store, Motisons Tower, located on Tonk Road, Jaipur.

#3 – Online Presence and Digital Sales:

  • Online platform since 2011, with online sales commencing in 2018.
  • Virtual appointments and online catalog for younger, digitally savvy customers.
  • Diverse products offered online that may not be available in showrooms.

#4 – Sourcing and Manufacturing Capabilities:

  • Primarily source finished jewelry from third-party suppliers across India.
  • Engagement of artisans on a job work basis and own manufacturing facilities in Jaipur.
  • Outsourcing work to various artisans for a large variety of handcrafted jewelry.

#5 – Customer-Centric Approach:

  • Focus on design and innovation, reflecting customer preferences and market trends.
  • Dedicated design team for developing new products and meeting customer requirements.
  • Customization of jewelry for individual needs.

#6 – Market Position and Strengths:

  • Legacy of over 20 years in the jewelry trade.
  • Well-positioned to capture market opportunities.
  • Strong brand name with heritage and legacy.

#7 – Operational Efficiency and Risk Mitigation:

  • Established systems and procedures for risk mitigation and inventory management.
  • Technology focus, safety, security, and surveillance systems.
  • Efficient procurement of raw materials to avoid adverse financial effects.

#8 – Strategic Growth Strategies:

  • Cost-efficient expansion of the retail network leveraging the “Motisons” brand.
  • Focus on expanding the product and brand portfolio to cater to existing gaps.
  • Emphasis on technology for growth, including online channels.
  • Continued investment in marketing and brand-building initiatives.

Why NOT to invest in Motisons Jewellers IPO?

Investors should carefully consider these risk factors before deciding to invest in Motisons Jewellers Limited IPO.

#1 – Heavy Dependence on Third-Party Suppliers:

  • Heavy reliance on third parties for the supply of products.
  • Disruptions or failures in third-party production or manufacturing facilities may impact reputation and financial condition.

#2 – Promoter Legal History:

  • Promoters were involved in past proceedings related to betting in Indian Premier League cricket matches.
  • Although discharged, any re-opening of the matter could negatively impact business and reputation.

#3 – Regulatory Proceedings Involving Promoters:

  • Promoters and Promoter Group members are involved in proceedings with SEBI and/or Stock Exchange and other regulatory authorities.
  • Unfavorable orders or penalties may affect business and reputation if imposed on promoters or members of the Promoter Group.

#4 – SEBI Violations and Penalties:

  • Past instances of SEBI Act and Regulations contravention by promoters and Promoter Group members.
  • Imposed fines and temporary debarment from accessing the capital market during a specific period.
  • Future violations may impact goodwill and prospects.

#5 – Financial Arrangements and Borrowings:

  • Unsecured loans from promoters and Promoter Group with an average interest rate of 11.60%.
  • Making prepayments from IPO proceeds at a lower interest rate than borrowings from promoters and the promoter group.

#6 – Geographical Concentration:

  • All four showrooms located in one geography, Jaipur, Rajasthan.
  • Adverse developments affecting the region may have a significant adverse effect on the business, prospects, and financial condition.

Investors should go through all risk factors indicated in the RHP.

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Motisons Jewellers IPO – Conclusion

  • Motisons Jewellers boasts over two decades of experience, a diverse product range of 300,000 jewellery designs, and strategic locations, both physical and online. This positions the company well to capitalize on market opportunities.
  • On the other side, investors should consider its dependence on third-party suppliers, legal history concerns related to promoters, ongoing regulatory proceedings, past SEBI violations, and the risk associated with all showrooms being concentrated in Jaipur, Rajasthan.
  • Its IPO price is also attractively priced.

Investors who understand all these pros and cons may consider investing in such IPOs.

Suresh KP

4 comments

  1. Hello Sir,

    I read in the pas Promotors were involved in cricket betting and SEBI banned them for few yrs.
    It would be good if you highlight this point as well.

  2. Suresh brother you are doing an awesome selfless service to all with your blog articles. One sugg earlier in prev yrs along with IPO analysis you also used to mention if you are planning to apply or not. Your stamp gives an added boost after analysing the pros and cons of the ipo. Pls continue to give your plan also

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