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Tuesday, January 24, 2006

Chandrani Pearls plans IPO

Chandrani Pearls is planning an initial public offering, IPO, latest by 2008 to fund its aggressive pan-Indian expansion target of setting up 100 stores by the same year, reports Business Standard.

Speaking on the unveiling of the new 21st anniversary range, Kuldip Nayar, owner of Chandrani Pearls said that the whole business of promoting pearls in India is very capital intensive as it involves a lot of category promotion, the awareness levels being very low and thus such an aggressive marketing and promotional activities assumes generic importance.

The company currently spends 15% of its turnover on marketing and promotional activities.

"The estimated cost of expansion target would be around Rs 30 crore (Rs 300 million) while the current pearl market in the country is estimated at Rs 35 crore (Rs 350 million), being at a nascent stage," Nayar added.

The market size also includes the Hyderabadi pearl shop owners numbering 300 to 400.

Many of them, like Mangat Rai and Jagadamba pearls, had recently switched focus to gold. The company currently has over 40 showrooms across the country and plans to open four more by March 31, 2006.

Nayar pointed out that from a modest beginning of Rs 18 lakh turnover in 1994-95 it has grown to Rs 11 crore (Rs 110 million) in the last fiscal.

The target for the current fiscal is Rs 14 crore (Rs 140 million) and Chandrani Pearls is expected to cross Rs 25 crore (Rs 250 million) in turnover by 2008, Nayar stated.

The company has experienced 25% growth year on year for the last three years, he remarked.

In the last seven years the annual average cumulative growth rate has been 55%, Nayar outlined.

Chandrani Pearls is the only pearl distributor, which besides offering a certificate of authenticity offers a 70% buy back guarantee on all pearls sold by them.

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