Shanti Gold International IPO: Gold jewelery manufacturing company Shanti Gold International is going to launch IPO. The company has filed draft paper for this with market regulator SEBI. The company intends to use this fund for facility expansion and working capital needs. According to the draft red herring prospectus filed on January 13, 1.8 crore new equity shares will be issued under the IPO. At the same time, there will be no sale through Offer for Sale (OFS). This means that the entire proceeds from the IPO will go to the company.
Where will Shanti Gold use the funds?
Shanti Gold International intends to spend Rs 45.8 crore of the IPO proceeds to set up the proposed Jaipur facility. “The Jaipur facility will have an installed production capacity of 1200 kg, taking our current installed production capacity from 2700 kg to a total of 3900 kg,” the company said in its DRHP.
Overall, plain gold jewelery accounts for 85 per cent of the company’s total bridal jewellery. The company said that the Jaipur facility has been prepared to meet the increasing demand for plain gold jewellery. Additionally, the company will use Rs 190 crore for working capital needs, Rs 20 crore for debt repayment and the remaining amount for general corporate purposes.
Shanti Gold business
Mumbai-based Shanti Gold International was established in the year 2003. The company claims to be one of the largest manufacturers of 22 carat CZ casting gold jewelery in terms of installed production capacity. It will compete with listed companies like Utssav CZ Gold, RBZ Jewelers and Sky Gold.
Shanti Gold’s financials
Talking about financials, Shanti Gold International has reported a net profit of Rs 26.9 crore for the year ending March 2024, which is 35.6 percent more than the previous financial year. Revenue increased by 4.7 percent to Rs 711.4 crore during FY24. In the first half of the current financial year, profit stood at Rs 18.3 crore on revenue of Rs 505.9 crore. Choice Capital Advisors has been appointed as the book running lead manager for the issue.
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