Jewellery retail chain Joyalukkas withdraws ₹2,300 crore IPO

• The Kerala based jewellery chain intended to raise around ₹2,300 crore via a public issue.
• As of February 28, 2022 the company had total outstanding borrowings of ₹1,524 crore.
• The company has a strong foot in the southern states with 92% of its revenue coming from the southern part of India.

Kerala-based jewellery retail chain Joyalukkas India withdrew its ₹2,300 crore initial public offering (IPO), markets regulator Securities and Exchange Board of India SEBI said on its website on Tuesday.

The regulator said that the issue was withdrawn on February 17. The jeweller had filed its draft red-herring prospectus (DRHP) with the regulator in March 2022. It was expected to announce its IPO date early this year.

The company had intended to raise around ₹2,300 crore through a fresh issue of shares. About 60% of the IPO proceeds were to be used to pay debt, with some earmarked towards opening new stores.

As of February 28, 2022 Joyalukkas had total outstanding borrowings of ₹1,524 crore.

Joyalukkas sells jewellery made of gold, studded and other jewellery products that include diamond, platinum, silver and other precious stones. The company has a strong foothold in the South with 92% of its revenue coming from the southern states. The company operates 85 showrooms under the “Joyalukkas” brand located across 68 cities.

“We are currently present in most parts of the southern region and intend to deepen our penetration in such regions, where there could be potential for further expansion due to the demand of jewellery in the region,” the company had said in its DRHP.

Large IPOs delayed or withdrawn
Joyalukkas has joined a growing list of companies that have withdrawn or delayed their IPO plans. Last year, ecommerce player Snapdeal withdrew its plans to raise $152 million via public offer, citing market conditions.

PharmEasy too cited market conditions as it withdrew its papers and is considering a rights issue instead. Used cars marketplace and unicorn Droom too went back on its plans to raise as much as ₹3,000 crore via a public issue of shares.

B2B e-commerce player Udaan raised $120 million in convertible notes and debt in November 2022, instead of going ahead with its IPO plans.

After a stellar IPO season late last year, 2023 has had a slow start. Only two companies – Radiant Cash Management Services and Sah Polymers – listed on the stock exchanges in 2023, amid volatile market conditions.

As many as 18 companies went in for IPOs in the quarter ending December 2022, says a report by Ernst Young.

Indian markets have underperformed as compared to its peers this year, due to attractive investment opportunities in China, Hong Kong and South Korea with better valuations.

Nifty50 slipped nearly 2% in 2023 so far while Sensex is down 0.74%. In the period, US benchmark indices such as Nasdaq, S&P 500 and Dow Jones Industrial Average gained between 2-13%.

The situation has reversed from last year when Indian markets outperformed global markets including the US, China, Hong Kong, UK and others. In 2022, Sensex gained 2.8%, Nifty50 up 2.7% while Nasdaq dropped 33%, Dow Jones Industrial Average was down 9%.

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