Tribhovandas Bhimji Zaveri Ltd. (TBZ) aims to raise around $39 million (INR 2 billion) through its initial public offering (IPO) of 16.7 million equity shares that hits the capital market on April 24.
TBZ, which primarily sells gold jewelry and diamond-studded jewelry, is diluting 25 percent stake in the company and has fixed the price band at $2.30 to $2.50 (INR 120-INR126) per equity share for the issue. The minimum bid lot is 45 equity shares and in multiple of same. The issue closes on April 26, 2012.
“We intend to utilize the net proceeds to finance the establishment of new stores and for the incremental working capital requirements,” said Shrikant Zaveri, chairman of TBZ.
TBZ, which has a diamond-studded jewelry manufacturing unit in Mumbai, currently operates 14 showrooms in 10 cities. It plans to open an additional 43 showrooms by the end of fiscal year 2015.
“The company is looking at raising about INR 2 billion through the IPO,” an investment banker said.
TBZ in its draft prospectus filed with the capital market regulator Securities and Exchange Board of India (Sebi) stated that it plans to invest $3.7 million (INR 191.94 million) to establish new showrooms and $31.3 million (INR 1.60 billion) to meet incremental working capital requirements, among others.
The company said that it plans to open nine new showrooms in fiscal 2013 in Aurangabad, Gandhidham, Hyderabad, Nagpur, Vadodara, Valsad, Visakhapatnam and Kolkata.
CRISIL has assigned an ”average” grade to the company’s proposed IPO.
TBZ has proposed to list its equity shares on the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE). The book running lead managers to the issue are IDFC Capital Limited and Avendus Capital Private Limited.