Joyalukkas files DHRP to raise Rs 2,300 crore: Key highlights

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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.
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