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Tara Jewels Limited
Price Band: Rs. 225 to Rs. 230 per share
Bid Lot: 50 shares
Issue opens on: November 21, 2012
Issue closes on: November 23, 2012
INITIAL PUBLIC OFFERING – Public Issue of equity shares aggregating upto Rs. 179.5 Crore comprising a Fresh Issue of
shares by the company aggregating to Rs. 109.5 Crore and an Offer for Sale of shares by Fabrikant H.K. Trading Limited
aggregating to Rs. 70 Crore. The Company has made a Pre-IPO placement of 1.8 million shares at a price of Rs. 225 for Rs.
40.5 Crore, in the form of Fresh Issue of equity shares to Crystalon Finanz AG.
OVERVIEW OF THE COMPANY
Integrated player in jewellery industry engaged in designing, manufacturing, exporting and retailing of
diamond studded jewellery
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Offers products across price points and segments including high-end, mid-market and value market
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Portfolio includes gold, platinum, honeydium, and silver jewellery with or without studded precious and semiprecious stones
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Higher margins compared to peers due to high proportion of studded diamond jewellery as against gold
jewellery
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Business can be divided into 3 operations: Manufacturing, Exporting and Retailing
Manufacturing
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4 manufacturing facilities – 3 in Mumbai (SEEPZ and MIDC) and 1 in Panyu (China)
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Spread over 84,000 square feet employing 35 designers and 955 craftsmen
Exports
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Exports studded jewellery to leading retailers like Walmart, Zale, Signet, Christ, JC Penny etc
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Exports to Australia, Canada, Europe, USA, UK and UAE
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~85% of the revenue currently comes from export operations
Retail
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Started retail operations in 2008 and rapidly scaled to 30 stores by 2010
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Achieved break even for all stores in the first year
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Promoted by Rajeev Sheth, a certified gemologist from GIA (USA) and a first generation entrepreneur with
30+ years of experience in jewellery industry
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Started his career with promoting high-end jewellery boutique called Rose International
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Former Promoter and MD of Intergold India
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Set up India’s first diamond jewellery retail chains currently called Orra
•
Business
Overview
Promoter
Background
•
Business
Strategy
•
Expand Retail Presence in India
Expand retail footprint to cover all of India across metros, mini metros, class I, II, III towns
Exploring alliance opportunities to tie-up with designer boutiques to foray into high-end retail jewellery
Strengthen Relationships with Key Customers
Extend proprietary Inventory Management Program viz Plan B to additional key customers
Continue developing partner brands and programs to jointly tap new customer segments, new markets
and business opportunities
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•
•
•
•
Strengths
•
•
Pre-Issue
Share
Holding
Pattern
Financial
Snapshot
(Balance
Sheet
Summary)
Financial
Snapshot
(P & L
Summary)
Dominant in Exports: Associated with the best globally
Largest studded jewellery exporter from 2006-08 distributing to 12000 stores globally
Marquee customers like Walmart, Zale, Sterling, Matsumoto, Signet, JKB, Disions, Christ, JC Penny etc
contribute ~60% of the total export sales
During 2008-12, exports to these customers grew at a CAGR of 30%
Strong Partnerships with Leading Retailers
Co-branding initiatives with marquee retailers like H. Samuel, Walmart, QVC Austria & JC Penny
Association with these customers for 10+ years and 70% of orders are repeat orders
Low Risk Business Model
100% credit insurance from ECGC for all international customers
Hedge against gold price fluctuations through gold loans
Focus on Retail for rapid scale up
Targeting a large and rapidly growing market
Focus on customer education to build customer confidence and make jewellery purchase a transparent
process
Unique Store Format leading to higher profitability
Location of retail stores in high street locations in jewellery clusters to catch the catchment area
Smaller stores of 1000 sq. ft. to reduce rent and other fixed costs
Re-engineered the retail format with a browse wall concept for lower in-store inventory
Strong Sales Growth Track record and higher margins
Sales grew from Rs. 611 Crore in FY08 to Rs. 1,399 Crore in FY12 - CAGR of 23%
Efficient operations led to improving margins: EBITDA margins grew from 6.9% to 9.7% and PAT margins
grew from 3.5% to 4.1% from FY08 to FY11
Higher margins compared to peers due to higher proportion of diamond studded jewellery in comparison
to pure gold jewellery
Name of the shareholders
Promoters and Promoters Group
Fabrikant H.K. Trading Limited
Crystalon Finanz AG
Individuals
Total
No. of shares held
14,759,998
3,239,999
1,800,000
3
19,800,000
% shareholding
74.55%
16.36%
9.09%
Negligible
100.00%
Rs. Million
Fixed Assets
Total Current Assets
Total Current Liabilities
Net Worth
Mar 2008
274
3,777
3,220
857
Mar 2009
553
6,949
6,005
1,536
Mar 2010
621
5,809
4,674
1,778
Mar 2011
734
9,360
7,883
2,213
Mar 2012
810
10,948
8,925
2,773
May 2012
787
11,190
9,091
2,838
Rs. Million
Sales
EBITDA
EBITDA Margin (%)
PAT
PAT Margin (%)
Mar 2008
6,057
421
6.9%
214
3.5%
Mar 2009
7,541
574
7.2%
76
1.1%
Mar 2010
8,044
686
8.4%
245
3.0%
Mar 2011
11,422
984
9.7%
413
4.1%
Mar 2012
13,990
1338
7.2%
555
2.5%
May 2012
1,789
200
11.2%
65
3.6%
ISSUE SUMMARY
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Issue
•
•
Total Issue size of Rs. 179.5 Crore comprising Fresh issue component of Rs. 109.5 Crore and Offer for Sale
component of Rs. 70 Crore
Pre-IPO placement of 1.8 million shares at a price of Rs. 225 for Rs. 40.5 Crore, in the form of Fresh Issue of
equity shares to Crystalon Finanz AG
Proceeds to be used towards opening new retail stores (Rs. 66.5 Crore) and loan repayment (Rs. 50 Crore)
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