Senco Gold Launches QIP After Board Approves ₹500 Crore Fundraise

Senco Gold Ltd. has rolled out a Qualified Institutional Placement (QIP) to raise ₹500 crore. The floor price has been set at ₹1,139.49 per share, which is slightly lower (0.33% discount) than its last close. Interestingly, the company can offer a further discount of up to 5% if it chooses to.

This isn’t the first time the jewellery retailer has raised funds since its IPO in July 2023, where it brought in ₹270 crore at ₹317 per share. Earlier in October, Senco Gold’s board had approved raising up to ₹2,500 crore through QIP and other permissible methods.

What’s Next

The company is channelling these funds to fuel its expansion plans, with a target to open 18–20 new stores annually. This includes a mix of company-owned outlets and franchise locations.

The Numbers Behind the Business

In Q2 FY25, Senco Gold posted a net profit of ₹12.1 crore, a marginal increase from ₹11.9 crore in the same period last year. Revenue saw a solid 31% jump to ₹1,500.5 crore, backed by a 7% rise in gold volumes and a 30% boost in gold jewellery value. EBITDA also grew to ₹51.9 crore from ₹39.5 crore in Q2 FY24.

Market Context

Gold prices in India are on the rise, hitting ₹78,460 per 10 grams for 22-carat gold on December 11. Global factors like the U.S. Federal Reserve rate cuts and geopolitical tensions are influencing this trend. 

Senco’s stock has had a good run this year, climbing 67% year-to-date and 60% over the last 12 months. Today, on December 11, the shares were trading at ₹1,190 on the NSE, up 2% in early trade. All in all, it seems like Senco Gold is positioning itself for growth with this fundraise, aiming to expand its reach.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.