Motisons Jewellers IPO opens on Dec 18, price band set at ₹52-55/sh

• The IPO is set to open for subscription on December 18 and close on December 20.
  
• The IPO comprises an entirely fresh issue of up to 2,74,71,000 equity shares.
  
• Net proceeds will be used to repay existing borrowings, among other things.
  

Motisons Jewellers has set a price range of ₹52 to ₹55 per equity share for its inaugural initial public offering (IPO). The IPO is set to open for subscription on Monday, December 18, 2023, and will close on Wednesday, December 20, 2023. Investors can bid for a minimum of 250 equity shares, and in multiples of 250 thereafter.

This public issue entails equity shares with a face value of ₹10 per equity share and comprises an entirely fresh issue of up to 2,74,71,000 equity shares. There will be no offer for sale (OFS) component.

The management of Motisons Jewellers is helmed by second-generation entrepreneurs, namely Sandeep Chhabra, the Chairman and Whole Time Director, and Sanjay Chhabra, the Managing Director.

The company intends to utilise the net proceeds from the fresh issue for specific objectives, including the repayment of existing borrowings obtained from scheduled commercial banks.

Additionally, these funds will be allocated towards meeting the working capital needs of the company. The remainder will be earmarked for general corporate purposes, contributing to various operational facets and strategic initiatives.

Motisons Jewellers is a well known jewellery brand for over 20 years. They started small in Jaipur's Johri Bazaar, but have grown into a brand with stores across Rajasthan.

Their product line spans traditional, contemporary, and fusion designs, catering to various jewellery preferences and occasions. This includes jewellery suitable for weddings, festivals, daily wear across all age groups and genders, and covers a diverse price spectrum.

Financials and risk factors

Here is a snapshot of the financials of the company.


* Before tax and extraordinary items

However, investors should be aware of risk factors as listed in the draft red herring prospectus (DRHP).

The company heavily relies on third-party suppliers for product provision, and the inability to establish or maintain formal agreements with these entities could pose significant risks.

Disruptions in the production or manufacturing facilities of these third parties, along with their supply chain arrangements or failure to meet quality standards, might adversely impact the company’s reputation, business operations, and financial standing.

Previously, the Promoters, Sanjay Chhabra and Sandeep Chhabra, were involved in legal proceedings initiated by an investigation agency concerning betting in Indian Premier League cricket matches. Although they have been formally cleared of these charges, any potential reopening of these matters could potentially harm the company’s business and reputation.

Further, among the promoters and members of the promoter group, there are ongoing legal proceedings involving SEBI and other regulatory bodies. If SEBI or any regulatory authority were to issue adverse orders, such as penalties or debarring the mentioned promoters or members of the promoter group from accessing the capital market, it could significantly impact the company’s business operations and reputation.