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Wednesday, March 17, 2010

Shree Ganesh plans to raise Rs 375 cr via IPO

Kolkata-based Shree Ganesh Jewellery House, an exporter of handcrafted gold jewellery, plans to tap the capital market through an initial public offer (IPO) to fund expansion plans.

The company, which also exports to West Asia, Singapore and Hong Kong, plans to issue 142,69,831 equity shares having a face value of Rs 10 each. Though the price band has not been revealed, sources said it could be priced between Rs 260 and Rs 275 a share, with the company raising Rs 375 crore at the higher end and Rs 360 crore at the lower end of the band.

Credit Suisse, which invested USD 20 million for about 11% equity stake in the company in March 2008, will offload a part of its holding for Rs 60 crore.

Umesh Parekh, Managing Director, Shree Ganesh Jewellery, said the company would invest Rs 150 crore to expand capacity at its jewellery manufacturing units at Mandal Pada and Domjur, besides setting up a modern manufacturing unit at Manikanchan SEZ, in Kolkata.

The company intends to set up a two-tonne capacity gold refinery unit with an investment of Rs 5 crore. The unit will recycle gold jewellery. The refinery would enhance profits by 3% to 4%, said Parekh.

“The country recycles about 200 tonnes a year of old jewellery, which passes through three to four intermediaries before coming for refining. Collecting directly from customers will result in substantial savings,” he said.

Shree Ganesh plans to add more retail outlets – from the existing 10 to 40 in two years. The retail outlets will also accept old jewellery of any make for recycling.

Due to lower production cost, the company plans to invest Rs 15 crore on brand building and offer jewellery at a rate that is at least 10 per cent lower than what competitors offer.

Besides Gaja, the company owns seven other brands targeted at different categories, such as Sitaare (for children), GM Gold (one-gram gold), Marigiold (small pieces), G Elements (22k gold jewellery for men), Gold Bridals, Dianique (designer diamond jewellery), YOU (18k diamond heart collection) and Distar.


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