Muted start for RBZ Jewellers as shares list at Rs 100, same as issue price

RBZ Jewellers made a muted debut on Dalal Street as its shares were listed at Rs 100, marking no improvement over its IPO issue price on the National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE).

Despite the anticipation surrounding the IPO, RBZ Jewellers' shares in the grey market maintained a flat trajectory, trading at 0, indicating no premium over the IPO price at the time of listing. This trend has persisted since December 21, holding steady at Rs 5, and December 19, when it was at Rs 30.

Shivani Nyati, Head of Wealth, Swastika Investmart Ltd, said, "RBZ Jewellers' stock market debut mirrored pre-listing whispers, landing at Rs 100 per share, flat listing with zero listing gain on its issue price. This lackluster listing, in line with the subdued grey market trend, reflects cautious investor sentiment toward the company despite its apparent strengths."

"While RBZ Jewellers possesses strong fundamentals and a fair valuation on the surface, the significant risks cannot be overlooked. The flat listing serves as a stark reminder of the potential pitfalls associated with gold price volatility, client concentration, informal artisan arrangements, and intense competition. Thus, investors are suggested to exit their positions," Nyati noted.

The company's Rs 100 crore Initial Public Offering (IPO) was open for subscription from December 19 to December 21, offering shares in a price band of Rs 95-100 each. Before the IPO launch, the company successfully garnered Rs 21 crore from anchor investors, allocating 21 lakh shares at Rs 100 per share to three anchor investors.

The IPO received a subscription rate of 6.86 times, with the retail investors' segment witnessing a robust subscription rate of 24.74 times. Non-institutional investors (NIIs) subscribed at 9.27 times, while qualified institutional buyers (QIBs) displayed healthy demand with a subscription rate of 13.43 times.

RBZ Jewellers IPO details reveal a completely fresh issue of 1 crore shares worth Rs 100 crore, with no offer for sale (OFS) segment. The net proceeds of Rs 80.75 crore from the IPO are earmarked to meet working capital requirements, and up to 25 percent of the gross proceeds will be allocated for general corporate purposes.

In terms of allocation, not more than 50 per cent of the shares were reserved for qualified institutional buyers (QIBs), a minimum of 15 per cent for non-institutional investors (NIIs), and not less than 35 per cent for retail investors. Leading the book-running management of the IPO is Arihant Capital Markets, while Bigshare Services will serve as the registrar of the offer.

Established in April 2008, RBZ Jewellers specialises in crafting antique gold jewellery and operates its retail store under the "Harit Zaveri" brand. Based in Ahmedabad, Gujarat, the company aims to strengthen its foothold in Southern India, which represents 41 per cent of the country's total jewellery demand.