Is Investing in Divine Hira Jewellers Ltd IPO a Profitable Opportunity?

Divine Hira Jewellers Ltd, a notable entity in the Indian jewelry sector, has announced its Initial Public Offering (IPO), open for subscription from March 17 to March 19, 2025.

 The company aims to raise ₹31.84 crores through this public issue.

Company Overview

Established in December 2022, Divine Hira Jewellers Ltd specializes in crafting a diverse range of jewelry, including gold, diamond, and gemstone pieces. Despite its relatively recent inception, the company has rapidly established a presence in the Indian market, earning a reputation for quality craftsmanship and innovative designs.

IPO Details

• Issue Type: Fixed Price Issue

• Issue Size: 35,37,600 equity shares, aggregating up to ₹31.84 crores

• Face Value: ₹10 per equity share

• Issue Price: ₹90 per equity share

• Lot Size: 1,600 shares

• Minimum Investment: ₹1,44,000 for retail investors

• Listing Platform: NSE SME

Important Dates

• IPO Opening Date: March 17, 2025

• IPO Closing Date: March 19, 2025

• Basis of Allotment Finalization: March 20, 2025

• Initiation of Refunds: March 21, 2025

• Credit of Shares to Demat Accounts: March 21, 2025

• Listing Date: March 24, 2025

Financial Performance

Divine Hira Jewellers Ltd has demonstrated steady financial growth in its short operational history. Key financial metrics include:

• Net Sales/Income:

  • FY 2021-22: ₹142.40 crores

  • FY 2022-23: ₹124.95 crores

  • FY 2023-24: ₹183.26 crores

• Net Profit:

  • FY 2021-22: ₹0.29 crores

  • FY 2022-23: ₹0.77 crores

  • FY 2023-24: ₹1.48 crores

• Earnings Per Share (EPS):

  • FY 2021-22: ₹0.40

  • FY 2022-23: ₹1.05

  • FY 2023-24: ₹2.02

Balance Sheet Highlights

• Equity Share Capital:

  • FY 2021-22: ₹0.00 crores

  • FY 2022-23: ₹7.32 crores

  • FY 2023-24: ₹7.32 crores

• Reserves & Surplus:

  • FY 2021-22: ₹3.00 crores

  • FY 2022-23: ₹1.00 crores

  • FY 2023-24: ₹2.49 crores

• Secured Loans:

  • FY 2021-22: ₹16.54 crores

  • FY 2022-23: ₹14.05 crores

  • FY 2023-24: ₹18.61 crores

Utilization of IPO Proceeds

The funds raised through the IPO are planned to be allocated as follows:

• Debt Reduction: ₹3.00 crores (9.42%)

• Issue Related Expenses: ₹3.65 crores (11.46%)

• Working Capital Requirements: ₹19.00 crores (59.67%)

• General Corporate Purposes: ₹6.19 crores (19.43%)

Industry Outlook

The Indian jewelry sector is poised for significant growth, driven by increasing disposable incomes, cultural affinity towards gold, and a growing demand for branded jewelry. Companies like Divine Hira Jewellers Ltd, with an emerging market presence and brand recognition, are well-positioned to capitalize on these trends.

Subscription Status and Grey Market Premium (GMP)

On the first day of the IPO, Divine Hira Jewellers Ltd's offering was subscribed 52%, with the retail segment leading at 99%. However, the Grey Market Premium (GMP) for the shares is currently at zero, indicating cautious sentiment among investors.

How to Apply for Divine Hira Jewellers Ltd IPO

Investors can apply for the IPO through various methods:

1. ASBA (Application Supported by Blocked Amount): Utilize your bank's net banking services to apply, ensuring that the application amount remains in your account until share allotment.

2. UPI (Unified Payments Interface): Apply via UPI through platforms like Zerodha, Upstox etc.

3. Offline Application: Submit a physical application form through registered stockbrokers

• Apply for Divine Hira Jewellers IPO via Zerodha

• Apply for Divine Hira Jewellers IPO via Upstox

Investment Considerations

Strengths:

• Established Market Presence: A recognized brand in the Indian jewelry market.

• Diverse Product Portfolio: Offers a wide range of jewelry catering to various customer preferences.

• Industry Growth: Positioned to benefit from the expanding jewelry sector in India.

Risks:

• Market Competition: Faces competition from other established jewelry brands.

• Economic Sensitivity: Jewelry demand can be affected by economic downturns.

• GMP Indicator: Current zero GMP may reflect cautious investor sentiment.

Conclusion

Divine Hira Jewellers Ltd's IPO offers investors an opportunity to invest in a well-established jewelry brand with a strong market presence. While the company's prospects appear promising, potential investors should carefully assess the associated risks and consider their investment objectives.

Disclaimer: This article is for informational purposes only and does not constitute financial advice. Prospective investors should consult with a certified financial advisor before making investment decisions.

sources of information:

Moneycontrol, economictimes, goodreturns