Joyalukkas files DHRP to raise Rs 2,300 crore: Key highlights
Joyalukkas, a Kerala-based jewellery retail chain, has filed draft papers with the SEBI to raise Rs 2300 crore via IPO. Let us look at the details:
Joyalukka IPO: About the company
- Joyalukkas started operations in 2002 by setting up a showroom in Kottayam, Kerala. Currently, they operate 85 showrooms under the Joyalukkas brand located across 68 cities.
- Of these 85 showrooms, six are large-format showrooms (with an area of 8,000 square feet or more), including the largest showroom in Chennai, Tamil Nadu which has an area of over 13,000 square feet.
- Their product profile includes traditional, contemporary, and combination designs across jewellery lines, usages, and price points.
- Their brand has a high brand recall through extensive market reach, consistent quality, innovative and customised design, high service level, and an evolved marketing strategy.
Joyalukkas India IPO: Offer Details
- Joyalukkas India has filed a draft red herring prospectus (DRHP) with SEBI to launch a Rs 2,300-crore IPO.
- The net proceeds of the issue will be utilised for repayment or prepayment of certain borrowings availed by the company worth Rs 1,400 crore.
- The company will use Rs 463.9 crore for financing the opening of eight new showrooms.
Joyalukkas IPO: Peers
Once the company is listed, it will join the likes of Titan Company, and Kalyan Jewellers India and will compete with them.
Joyalukkas IPO: Financials
- The revenue from operations was Rs 8,091.84 crore, Rs 8023.79 crore, and Rs 8,066.29 crore for Fiscals 2019, 2020, and 2021, respectively.
- The company's spending on advertising and marketing activities was Rs 137.41 crore, Rs 108.93 crore, Rs 51.67 crore, and accounted for 1.70%, 1.36%, 0.63% of their revenue from operations in such periods.
- The Net profit for the half-year ended in September 2021 stood at Rs 268.95 crore versus Rs 248.61 crore last year.
- In FY21, the company recorded the highest growth in EBITDA per square foot and the highest profit after tax margins among the top players in India.
Joyalukkas IPO details: USPs
- They are an established homegrown brand focused on sales and marketing strategy.
- One of the top jewellery companies in India and well-positioned to capitalise on industry growth.
- Joyalukkas has a presence across India with a strong foothold in South India.
- Diversified product portfolio across categories and price points.
Joyalukkas IPO: Growth Potential
- The company will leverage its brand value and will continue to expand the retail network in a cost-effective manner.
- It will focus on increasing the sale of studded jewellery and expanding its product portfolio.
- It plans to leverage technology to grow its operations and focus on online channels.
- Focus on the B2B segment and arrangements with leading corporations.
Joyalukkas IPO details: Risks
- Any deterioration in public perception of the brand could adversely impact its business.
- Their inability to identify customer demand accurately and maintain an optimal inventory level in showrooms.
- The showrooms are located mostly in south India. Any adverse development affecting such a region may hurt the business.