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Since last year it’s being observed that the jewellery makers are keen to have their brand name listed on the stock exchange. These brands are looking forward to massive expansion and eyeing IPO as a channel to raise fund from the market. But, all’s not well at this front. Stock market was abuzz with news on Joyalukkas issuing IPO to raise `650 crore. The IPO was expected to be at the May-end, but was ultimately called off. The Kolkata based jewellery exporter and retailer Shree Ganesh Jewellery felt the heat of volatile market and its stock price plunged to `160.65 the day it opened at `258.85 on BSE. Twice tried, in 2011 and 2012, but failed, jewellery exporter and retailer, Tara Jewels, has abandoned its dream for IPO for the time being due to waning market confidence. C Mahendra Exports Ltd was listed in January 2011 at `110 and since then after much ups and downs that included its steep rise of the stock price to `252 on 15 June 201 to falling down to `116.60 on 14 June 2012 the company has been struggling under the lows of the equity market. |
Recently, amidst much hype TBZ (Tribhovandas Bhimji Zaveri Ltd) has issued its IPO. The stock was listed on 9th May at `115 but the stock price closed at `110 that very day on the BSE, falling over seven per cent.
The overall equity market sentiment can be called bit dampened for the skyrocketing price of gold. The increase in gold prices has not been a very good thing for the jewellery manufacturers as it has been observed that sudden sharp fluctuation of prices suddenly affects the buying decision of customers. Sharmila Joshi, Head Of Equities, Fairwealth Securities views, “At the moment there has not been too much fancy for jewellery stocks. Because of the rupee depreciation we did see some buying in Gitanjali Gems as it exports quite extensively but overall the sentiment is muted.”
Why are these brands dreaming about IPO?
The primary purpose is to expand the presence, to increase the footprints. TBZ wants to take its total no of stores four times more, from 14 to 16. Another important purpose is capital infusion to scale up business operations. C Mahendra Exports plans to open a diamond processing unit in Gujarat and a jewellery manufacturing unit in Mumbai.
On the positive note, jewellery manufacturers and exporters are doing well in the global market, and much of it is occupied by the unorganised sector, which is mostly growing from small base. Also, in the domestic front, jewellery sector is gradually picking up. “Once the basket of discretionary spending goes up, the consumption of jewellery too will go up”, views Joshi.
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