SAIF-backed Senco files for $86m India IPO

The offer will consist entirely of freshly issued shares, according to Senco’s prospectus, and SAIF will not exit any of its holding. Senco plans to use the proceeds to increase brand penetration through the opening of 28 new showrooms over the next three years, as well as to meet its working capital needs for labor and inventory costs. Pricing for the shares has not been announced.

Founded in 1945 and headquartered in Kolkata, Senco claims to be eastern India’s largest organized jewelry retail chain, with 93 showrooms in 72 cities and towns. Of these showrooms, 48 are operated by the company, while 45 are operated under exclusive franchise arrangements.

The company primarily sells handcrafted gold and diamond jewelry, along with silver, platinum, and precious and semi-precious stones and metals. It also makes costume jewelry, gold and silver coins, and silver utensils. Most of its jewelry is designed in-house by a team that produces both mass-market and custom designs, and manufactured by independent local artisans and craftsmen, known in India as “karigars,” working under contract for the company.

For the year ended March 2018, Senco reported INR22.2 billion in revenue, up from INR18.5 billion the year before. Over the same period the company’s net profit grew from INR611 million to INR1.1 billion.

SAIF invested INR800 million in Senco in 2014. The firm currently holds 13.3 million compulsorily convertible shares in the company; upon conversion into equity shares this will give SAIF a stake of about 20%.

India’s jewelry retail industry has historically been dominated by family-owned standalone stores. However, organized retailers have made significant progress in recent years, thanks to successful advertising campaigns that have portrayed large retailers as capable of better quality control and a wider variety in designs.

Organized jewelry retailers have grown from less than 10% of the overall market 20 years ago to around 30% in 2017. Most brands are limited to a regional presence – for example, Senco and PC Chandra Jewellers are both focused on eastern India, while Warburg Pincus-backed Kalyan Jewellers operates in the south and PC Jewellers focuses on the north. Tanishq – the best-known pan-India jewelry brand, which acquired Tiger Global Management-backed Caratlane in 2016 – is owned by the Tata Group.

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• Topics
• South Asia
• Consumer
• Industrials
• IPO
• India
• SAIF Partners
• Exit