Motisons Jewellers To Use Proceeds From IPO To Bump Up Inventory
The Jaipur-based jeweller's initial public offering received the second highest bids of this year.
Motisons Jewellers Ltd. plans to use proceeds from its public issue for working capital requirement and to bump up its inventory, with an aim to diversify its product offerings.
The Jaipur-based jeweller's initial public offering received the second highest subscription this year at 159.6 times the shares on offer, behind only Plaza Wires Ltd.
More than 90% of the company's business comes from jewellery trading, unlike peers that have manufacturing as the main business. And it mostly outsources its jewellery requirement.
"We cater to customers with customisation requirement and replenish old stock in our manufacturing unit to reduce costs," Joint Managing Director Laksh Chhabra told NDTV Profit. "Utilisation (of manufacturing unit) is around 10%-15%, but it will increase based on demand for customization," he said.
On a query about related party transactions, he said Motisons' stores sign a 11-month lease on the plots owned by the promoters themselves.
Kaustubh Chhabra, the chief financial officer, said the company currently has two manufacturing units that caters to 400 kg of utilisation. "It (manufacturing) is a small portion of our business."
Laksh Chhabra said the company is primarily involved in jewellery trading activities and only manufactures for customised requirements.
"We are only focused on trading and not diversifying into other segments. We have vendors from all over India where we source our jewellery," he said.
"We want to diversify our (jewellery) portfolio. We want to add more modern designs, innovative and fusion type of jewellery and intend to increase our sales," he added.
According to the company's IPO prospectus, it intends to utilise the net proceeds from the fresh issue for repayment of current borrowings obtained from scheduled commercial banks, meeting the working-capital needs of the company and addressing general-corporate requirements.
IPO Subscription Status
The IPO was subscribed 159.61 times on its third and final day.
Institutional investors: 157.40 times
Non-institutional investors: 233.91 times
Retail investors: 122.28 times
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