Jaipur-based Motisons Jewellers has secured Rs 33 crore ($4.4 million) in pre-IPO funding from a consortium of investors including Sunil Kothari & Sons, Manish Parakh, and Prabhudas Lilladhar Advisory Services Private Ltd. The company privately issued six million shares at Rs 55 each following the approval from its board and shareholders.
The firm has also submitted preliminary IPO papers with market regulator Sebi, planning a fresh issue of up to 3.34 crore equity shares, excluding an offer-for-sale component. This move comes as part of the company's strategy to expand its operations and repay debts.
The proceeds from the funding round will be directed towards debt repayment, fulfilling working capital needs, and various corporate purposes. The jeweler currently operates a network of four showrooms under its own brand across Jaipur.
According to InvestingPro data, Motisons Jewellers operates with a significant debt burden, a fact that aligns with the firm's decision to direct the funding towards debt repayment. The company has been seeing accelerating revenue growth and yields a high return on invested capital, which could explain the investors' confidence in its growth prospects.
InvestingPro also points out that Motison Jewellers is a prominent player in the Specialty Retail industry. This positioning, combined with its consistent increase in earnings per share and the fact that it trades at a low P/E ratio relative to near-term earnings growth, make the company's decision to go public a strategic move.
Motisons Jewellers' decision to go public is part of a broader trend among Indian companies seeking to raise capital through the stock market. The firm's successful pre-IPO funding round underscores the confidence investors have in its growth prospects and market potential.
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