Senco Gold, the largest organised jewellery retail player in eastern India, is likely having a golden run since its marktrading debut that added glitter to the brand value and led to increased footfall across stores.
“We are seeing additional footfalls and our brand awareness among customers have increased due to the IPO,” Managing Director Suvankar Sen told ET Online. “Our sales is mostly driven by two things – one is the price factor and the offers during the wedding season that are running. In addition to that, we have seen an increase because of the IPO.”
Senco Gold had a stellar debut on the exchanges, listing at Rs 431, a premium of 36% over the IPO price in July. The issue was subscribed 73.34 times at the close, driven by heavy bidding from qualified institutional buyers on the last day. The part reserved for QIBs was subscribed by 180 times.
While the shares had dropped to Rs 358.25 rupees some weeks after the IPO in Mumbai trading, they have recouped to more than 400 levels again.
For the fiscal first quarter ending June, Senco had reported a 23% rise in consolidated net profit to Rs 27.6 crore.
Senco, which is planning a DMart-style expansion, has set eyes to penetrate deeper into the northern part of the country. The company has a retail network of 142 showrooms, including 62 franchises and 80 company-owned showrooms. 63% of its showroom are in West Bengal. IT is present now in 13 states and 96 towns and cities in India.
Senco said it is also seeing higher sales from a year earlier as the government has prohibited sale of gold jewellery without the hallmark and this is pushing customers to organised market.
However, Senco did not reveal the latest financial details.
The company has a strong financial track record with consistent dividends and robust return ratios, according to analysts. The company’s revenues have grown at a CAGR of 19% and sales crossed Rs 4000 crore in FY23 with a return ratio ROE of 18.9% and ROCE of 14.2% at the end of last fiscal.
Meanwhile, the company’s top official also said that smaller towns are also opening their wallets now and buying diamond jewelleries.
“While the metro cities contribute well, the smaller towns are also picking up in terms of trends and fashion, this is a very good change that we are seeing,” Joita Sen, Director of Marketing and Design, said.
Gold prices in India have surged over the last one year or so with retail prices for 24 carat hovering at near Rs 60,000. This comes during inflationary times, perhaps adding to consumers’ pains.
Sen said gold rates have increased by over 15% from a year-earlier, but the retailer has not seen ‘drastic change’ or significant hit in counter sales. Senco said the consumers have raised their budgets by 10-12%.
