Utssav Cz Gold Jewels Ltd. (UCGJL) is making waves in the jewelry industry with its innovative designs and manufacturing expertise in cubic zirconia (CZ) gold jewelry. Specializing in 18Karat, 20Karat, and 22Karat gold, UCGJL offers a diverse range of products including rings, earrings, pendants, bracelets, necklaces, watches, and brooches.
The company's niche lies in crafting lightweight CZ gold and rose gold jewelry, blending the elegance of gold with the brilliance of CZ stones, popularly known as 'American Diamonds'. These synthetic gemstones, made from zirconium dioxide, mimic diamonds in appearance and durability but are far more affordable.
UCGJL's key strengths are its focus on design innovation and deep understanding of consumer preferences. The company ensures its jewelry meets diverse regional tastes, offering high-end, medium-range, and affordable options, all hallmarked by the Bureau of Indian Standards (BIS). With a dedicated team of 15 CAD designers, UCGJL develops approximately 400 new designs each month, keeping ahead of market trends.
The company boasts a manufacturing capacity of 1,500 kg per annum and maintains long-standing relationships with renowned jewelry retailers like D.P. Abhushan Limited and Kalamandir Jewellers Limited. Its customer base spans 17 states and two union territories in India, as well as two countries abroad. As of March 31, 2024, UCGJL employs 69 people.
UCGJL is launching its initial public offering (IPO) to raise INR 69.50 crore by issuing 6,318,000 equity shares at INR 10 each. The price band is set at INR 104 to INR 110 per share, with the subscription window open from July 31 to August 2, 2024. Investors must apply for a minimum of 1,200 shares. Post-allotment, the shares will be listed on the NSE SME Emerge platform. The IPO constitutes 26.53% of the post-IPO paid-up capital, with proceeds earmarked for working capital (INR 60.50 crore) and general corporate purposes.
Over the last three fiscal years, UCGJL's financial performance has shown significant growth. Total income and net profit were INR 120.31 crore / INR 1.62 crore (FY21), INR 123.43 crore / INR 3.34 crore (FY22), and INR 239.72 crore / INR 7.15 crore (FY23). For the 11 months ending January 31, 2024, the company reported a net profit of INR 10.74 crore on a total income of INR 277.33 crore. Despite strong financials, the company's decision to go public with incomplete FY24 data raises transparency concerns.
The average EPS over the last three fiscals was INR 2.95, with an average RoNW of 29.84%. The IPO is priced at a P/BV of 8.26 based on its NAV of INR 13.32 (March 31, 2023) and 2.77 post-IPO NAV of INR 39.74 per share. The P/E ratio stands at 20.33 based on FY24 earnings and 36.67 based on FY23 earnings. Compared to listed peers like Ashapuri Gold and Sky Gold, UCGJL's pricing appears ambitious.
Despite its impressive product offerings and financial growth, UCGJL's IPO raises concerns due to incomplete financial data and a high asking price compared to its April 2024 private placement. Potential investors might consider the high-risk nature of this IPO and weigh the potential for low returns against other opportunities in the market.
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