Thangamayil Jewellery: From Negative IPO Listing to Multibagger Returns

Business Overview

Thangamayil Jewellery Limited, an India-based company, is primarily engaged in the manufacturing and sale of jewellery, along with other accessories and products. The company specialises in gold jewellery, diamond articles, and silver items. With a collective area of approximately 43,500 square feet, the company operates over 37 showrooms and approximately 13 exclusive Thangamayil Plus silver showrooms. 

The company primarily deals with four product lines, i.e., Gold, Silver, Diamonds, and Platinum; the sale of gold is a predominant source of its income.

It has also established four manufacturing units that employ in-house goldsmiths to craft designer jewellery, which is in vogue with the current trends in the marketplace.

Tamil Nadu, is a state that has the largest share (40%) of India’s total gold consumption. It has established its branches in various locations across Tamil Nadu, including Madurai, Coimbatore, Tirupur, Udumalapet, and many more. Furthermore, the company’s exclusive silver showrooms are located in Tiruppuvanam, Usilampatti, Devakottai, Sattur, Ilyangudi, etc. 

Financial Performance

If we check the company’s financials, in FY23 annual revenue experienced a significant increase of 43.75% YoY, rising from Rs 2193 Crore to Rs 3153 Crore. Company for the first time surpassed revenue over Rs 3000 Crore with the second-best highest year-on-year growth. The operating profit of the company stands at Rs 153 Crore, accompanied by an operating profit margin of 5%.

Furthermore, the net profit of the company amounts to Rs 80 Crore. The company’s return on capital employed (ROCE) and return on equity (ROE) are in double digits at 16.8% and 22.4%, respectively. The balance sheet size of the company has grown from Rs 471 Crore in FY12 to Rs 1247 in FY23. 

Stock Performance

Today, the shares of the company opened almost flat at Rs 1677.05 from the previous day’s closing price of Rs 1672.55 on the BSE. While writing the article, the shares are trading with a gain of a mere 0.15% at Rs 1675. 

Its 52-week high price is Rs 1742.15, which also coincides with the intraday high of the current trading session and its 52-week low price is Rs 944.15. The current market capitalisation of the company is Rs 22,72.17 Crore.  

Over the past 3 months, the company’s shares have delivered an impressive return of 60.96%. Looking at the last three years, the stock has generated a multibagger return of over 540%. 

On the last day of listing, the final issue price was fixed at Rs 75. While considering the return based on the listing price, it would leave you stunned, which is approximately 2130%. 

Regarding ownership, the promoters have 67.16% of the company’s shares. Whereas, stakes held by foreign institutional investors (FIIs) and domestic institutional investors (DIIs) are 0.16% and 11.46%, respectively. The remaining portion, which accounts for 21.21%, is owned by public investors.

IPO Highlight and Subscription details:

On the final day of the IPO, the company experienced a subscription rate of mere 1.12 times. The IPO received a response in the following manner, where the retail category subscribed at a rate of 2.26 times. The Qualified Institutional Buyers (QIB) category achieved a modest subscription rate of 0.52 times, while the Non-Institutional Investors (NII) category reached a subscription rate of 1.52 times. 

The final issue price fixed on the listing date which was January 29, 2010, was Rs 75 per share. Whereas on the listing day on February 19, 2010, the shares hit the Indian bourses at Rs 70.

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.