PN Gadgil Jewellers Eyes Markets Beyond Maharashtra

PN Gadgil Jewellers Ltd., which has a major presence in Maharashtra and Goa, aims to expand its operations to other states from FY27.

The company is currently going to focus on its operations spread across Maharashtra, said Managing Director Saurabh Vidyadhar Gadgil.

Maharashtra is a fast-growing market and there are lots of cities that PN Gadgil has not targeted and where it sees potential for further expansion, the top executive told NDTV Profit.

“This state has around a $10-billion market for gems and jewellery. When all that (expansion in Maharashtra) is done, we will be looking at expanding in the neighbouring states,” Gadgill said.

PN Gadgil Jewellers' Rs 1,100-crore book-building initial public offer, which opens on Sept. 10, comprises a fresh issue of 1.77 crore shares, totaling to Rs 850 crore, and an offer-for-sale portion of 52 lakh shares, aggregating to Rs 250 crore.

According to Gadgil, the company will follow the ‘Peshwa Route’. Elaborating, he said, “Peshwas first captured Maharashtra and later on moved to Madhya Pradesh, Chhattisgarh, Jharkhand, Uttar Pradesh, Bihar and Delhi. That’s the way the company will want to expand its footprints and be a leader in any state it goes into.”

He does not want his company to be just present in a city or a state, but rather be a meaningful player, which adds value in that particular region. “It’s a very well-planned and well-thought-of strategy. We want to focus on growth and profitability at the same time together,” Gadgil said.

“The first two years, FY25 and FY26, we will be primarily focusing on Maharashtra. Year three is when we look at the journey being taken out of Maharashtra. In seven years, we should be present in three to four states outside Maharashtra and hopefully by then we should be a 100-plus store company,” he said. 

PN Gadgil Jewellers plans to use the net proceeds from the IPO to open 12 stores across Maharashtra, with its primary focus on growth. “The plan is to add stores post the IPO and be the largest in all counts, be it the number of stores, profitability and all other parameters,” Gadgil said. 

The company will use Rs 300 crore from the proceeds to repay bank debts and then reuse that money to take non-fund-based limits, which are primarily metal loans.

Explaining the strategy, PN Gadgil Jewellers' Executive Director Kiran Firodia said that it will offer dual benefits to the company. “By shifting from fund to non-fund we are able to save the finance cost as well as our hedging purpose can also be mitigated,” he said.

The cost of debt will also reduce from 9.5% to 6–6.5%, according to Firodia , who is also the company's chief financial officer. The move will also enable the company to make savings in finance costs. “At the same time, we can use this finance cost as a tool for hedging. So by doing this, we will be able to get the benefit from both sides,” he added.

PN Gadgil Jewellers IPO will close on Sept. 12. The price band of the initial share sale has been fixed at Rs 456 to Rs 480 per share. The IPO listing date has been scheduled as Sept. 17.

The company offers gold, silver, platinum and diamond jewellery under its brand name ‘PNG’. The company has a presence only in Goa, outside Maharashtra. It also owns and operates a store in the United States.