IPO ANALYSIS: SHREE GANESH JEWELLERY HOUSE LIMITED

The Kolkata based, manufacturer and exporter of hand crafted gold jewellery is entering the capital market with issue of 1,42, 69,831 equity shares of Rs 10/- each, including the offer for sale of 21, 33,334 equity shares. The issue opens on 19-03-10 and closes on 23-03-10.

Nilesh Parekh and associates are the promoters of the company.

A Four Star Export House, exports its products to U.A.E, Singapore and Hong Kong. The Company’s export income has grown at a CAGR of 72.71% from FY 2007 to FY 2009 and  Company’s share in the India’s gold jewellery exports has increased from 1.83% to 6.10% during the same period. During the FY 2007, 2008 and 2009 the company  exported 86.73%, 94.19% and 99.23% of its products, respectively. 

The Company’s export performance has been recognized by the Gems and Jewellery Export Promotion Council (“GJEPC”) in 2007 – 2008 and  in 2008 – 2009 and has been awarded the ‘Outstanding Export Performance and Contribution in the Trade for Plain Precious Metal Jewellery Exports by Unit from EoU/EPZ’ for both the years.

Shree Ganesh Jewellery intends to utilize the issue proceeds, apart from expanding the existing facilities, to set-up new manufacturing facilities and for meeting the working capital requirements.

FINANCIALS   (Rs in crores)

                   

	07	08	09
TOTAL INCOME	827.24	1283.03	2218.20
NET PROFIT	48.53	89.66	132.45
EPS (Rs)	11.32	20.65	27.29
RONW (%)	51.39	33.45	33.31

The NAV per share as on 30-09-10 is Rs99.01

RISKS

The company proposes to diversify into the manufacture of machine made jewellery, diamond studded jewellery at the proposed plants, and intend to expand the chain of retail outlets. The limited experience in setting up and operating a manufacturing facility and under taking retail operations at a larger scale poses risks.