In the BSE SME exchange Bhakti Gems And Jewellery Ltd is going to launch their initial public offering tomorrow. I will try to figure out Bhakti Gems And Jewellery Ltd IPO review and investment opportunities and returns expected. We will also see whether our readers should invest in this IPO OR give it a pass. This is again a SME issue. So the issue rules for small and medium enterprises will be applicable to it.
Issue Date: May 17, 2017 – May 22, 2017
Offer Price: Rs. 20 per equity share
Minimum Application: 6000 equity shares
1) Working capital requirements.
2) Issue expenses.
Bhakti Gems & Jewellery Ltd is owned by Shri Akshay Mehta (has 41,52,100 equity shares at Rs. 10.77 each) and Smt Varshaben Mehta (has 1,99,500 equity shares at Rs. 13.38 each). The company is a manufacturer and wholeselling supplier of gold ornaments and they are based at Ahmedabad, Gujarat. They are a designer of jewellery too and outsources the manufacture from Ahmedabad, Rajkot and Mumbai on job work basis. Some major clients of Bhakti Gems & Jewellery Ltd is Kalyan Jewellers, Soni Dwarkadas, Ghanshyam Jewellers etc.
Analysing the promoters stake it has been noted that through the issue the promoters are not going to sell their holding in the company. This is indeed a good sign.
It has been noted that the company is increasing its turnover slowly but the profits are not increasing. This may be due to the debt of the company. The issue may reduce the debts by supplying them required working capital.
Bhakti Gems And Jewellery Ltd IPO Review: SME issue carry higher than average risk for investors. But taking into consideration that the promoters are not divesting from the company and the issue price is just less than twice of the promoter’s price we feel that risky IPO investors can give it a try for the long to medium term.