GLITTERS, BUT NOT GOLD
MAX.ISSUE SIZE (Rs) : 80 crores
PRICE BAND (Rs) : 125 - 150
ISSUE OPENS/CLOSES : 19th - 21st November, 2007
LISTING : BSE, NSE.
Renaissance Jewellery (RJ) is engaged in the manufacture and sale of studded gold, platinum and silver jewellery. It also markets studded jewellery products through retail stores operated by its 100% subsidiary.
The retail products are sold under the brand name, Lucera across eight retail outlets (five in Mumbai, one in Pune, one in Lucknow and one in Gurgaon) and sixteen shops.. RJ also exports loose diamonds since July 2007.
Its manufacturing units are located at the Santacruz Electronics Processing Zone’s (Seepz) in Mumbai and at Bhavnagar in Gujarat. The issue objectives include their expansion and the setting up of a US subsidiary.
On the flip side of the SWOT snapshot scale, there is clear geographical concentration of revenue with 96 per cent of RJ’s revenues accruing in the USA. Coupled with the dwindling fortunes of the US economy and currency, the picture that emerges, fails to inspire.
Add to that, client concentration risk, since the top two customers account for over 83 per cent, and the top five customers account for 99 per cent of consolidated revenue for Q108.
On the positive side, RJ’s subsidiary proposes to increase the number of retail outlets in India to more than 250 in the coming five years.
Similarly, the company’s capacity utilization has improved significantly to over 80 per cent in FY07 alongside consolidated capacity which is expected to increase to 4,000 kg in FY2010.
After adjusting for the warrants on offer alongside the shares, the EPS on the unadjusted profits stands at Rs.13 for FY08. However, this figure takes a tumble, when one adjusts the forex fluctuation gain of Rs 5.14 crore that boosts the PAT figure of Rs 7.23 crore in Q108.
Overall then, discerning investors can avoid the glitter on this stock.
MAX.ISSUE SIZE (Rs) : 80 crores
PRICE BAND (Rs) : 125 - 150
ISSUE OPENS/CLOSES : 19th - 21st November, 2007
LISTING : BSE, NSE.
Renaissance Jewellery (RJ) is engaged in the manufacture and sale of studded gold, platinum and silver jewellery. It also markets studded jewellery products through retail stores operated by its 100% subsidiary.
The retail products are sold under the brand name, Lucera across eight retail outlets (five in Mumbai, one in Pune, one in Lucknow and one in Gurgaon) and sixteen shops.. RJ also exports loose diamonds since July 2007.
Its manufacturing units are located at the Santacruz Electronics Processing Zone’s (Seepz) in Mumbai and at Bhavnagar in Gujarat. The issue objectives include their expansion and the setting up of a US subsidiary.
On the flip side of the SWOT snapshot scale, there is clear geographical concentration of revenue with 96 per cent of RJ’s revenues accruing in the USA. Coupled with the dwindling fortunes of the US economy and currency, the picture that emerges, fails to inspire.
Add to that, client concentration risk, since the top two customers account for over 83 per cent, and the top five customers account for 99 per cent of consolidated revenue for Q108.
On the positive side, RJ’s subsidiary proposes to increase the number of retail outlets in India to more than 250 in the coming five years.
Similarly, the company’s capacity utilization has improved significantly to over 80 per cent in FY07 alongside consolidated capacity which is expected to increase to 4,000 kg in FY2010.
After adjusting for the warrants on offer alongside the shares, the EPS on the unadjusted profits stands at Rs.13 for FY08. However, this figure takes a tumble, when one adjusts the forex fluctuation gain of Rs 5.14 crore that boosts the PAT figure of Rs 7.23 crore in Q108.
Overall then, discerning investors can avoid the glitter on this stock.
