P N Gadgil Jewellers shares end 65% higher on listing day; what should investors do?

Shares of P N Gadgil Jewellers ended % higher on the first day of trading on the stock exchanges after making a strong debut early today. The shares of the homegrown jewellery company listed at ₹834 on the BSE, a premium of 73.75% over the initial public offering (IPO) price of ₹480 apiece. On the NSE, the jewellery stock belled the day at ₹830 per share.

Post listing, the stock gained as much as 75.8% to hit a day’s high of ₹843.80 on the BSE, while it touched a high of ₹848 on the NSE. During the day, the counter witnessed some correction, with the stock price dropping to ₹782 and ₹781.50 levels on the BSE and NSE, respectively.

Finally, P N Gadgil shares settled 65.17% higher at ₹792.80 on the BSE, with a market capitalisation of ₹10,759 crore.  

The listing of P N Gadgil Jewellers shares was better than Street expectations as the stock was commanding a grey market premium (GMP) of ₹303.50 in the unlisted market, indicating listing price to be around ₹783.5 apiece.

P N Gadgil Jewellers raised ₹1,100 crore via IPO route, which was a combination of fresh issue worth ₹850 crore and offer for sale worth ₹250 crore. The issue garnered strong response from investors, with the IPO subscribing by 59.41 times, led by qualified institutional buyers (QIB). The quota reserved for QIB was booked 136.85 times, followed by 56.08 times in the NII category, and 16.58 times in the retail segment.

What should investors do now?

The ₹1,100-crore IPO of P N Gadgil Jewellers has received “Subscribe for long term” rating from most brokerages, citing the company’s stable and growing profits and returns ratios. At the upper price band of ₹456-480 per share, the company’s market cap was valued at around ₹6,513 crore at price-to-earnings (PE) of 42.2 times for FY24. At the end of the first day of trading, the market cap rose to Finally, P N Gadgil shares settled 63.85% higher at ₹786.50 on the BSE, with a market capitalisation of ₹10,759 crore.  

According to Shivani Nyati, Head of Wealth, Swastika Investmart Ltd, the robust listing performance of P N Gadgil underscores the strong investor interest evident in the IPO's oversubscription of 59.41 times. “The company's consistent financial growth and expansion plans have positioned it favorably in the market. While the IPO's valuation appeared fair, the significant listing gain suggests investors are optimistic about P N Gadgil's future prospects.”

She adds that the strong listing debut reflects investor confidence in the company's growth potential and financial stability. She suggested investors to consider booking partial profit, and those who want to hold it for the long term at a stoploss of around ₹750.

Mehta Equities has also recommended long-term investors to “HOLD” in P N Gadgil Jewellers for long-term perspective only. “Post listing as gold is a long term investment PN GADGIL can also be considered to hold it for long term. Fresh buying can only be considered if there are any dips in future due to market,” says Prashanth Tapse, Senior VP (Research).

“Due to its rich heritage of PNG brand equity and legacy of more than 150 yrs old, the market may give a higher valuation multiple compared to its listed peers. We believe PNG is well-positioned in India’s growing organised jewellery sector,” he adds.

The brokerage believes that the company's rapid growth, driven by its strategic expansion into underserved Tier II and III cities in Maharashtra (western India) and a growing presence online through its e-commerce platform and mobile app, positions it well to capture future market opportunities.

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