Thangamayil Jewellery falls below IPO price

Shares of Thangamayil Jewellery settled at Rs 71.10 on BSE, a 5.20% discount over the issue price of Rs 75.

The stock debuted at Rs 70, a 6.7% discount over the issue price. The counter clocked 86.13 lakh shares on BSE. The stock hit a high of Rs 79 and low of Rs 70.

The current price of Rs 71.10 discounts the year ended March 2009 EPS of Rs 5.46 by a PE multiple of 13.02.

The initial public offer (IPO) of Thangamayil Jewellery's ended on 29 January 2010 with an oversubscription of 1.12 times and bids for 45.88 lakh shares.

The issue saw good response from retail individual investors, with the quota reserved for them, getting oversubscribed 2.26 times. The portion reserved for non institutional investors and qualified institutional buyers was subscribed 1.52 and 0.51 times respectively. However the employee quota remained unsubscribed getting bids for 86160 shares as against 1.28 lakh shares reserved for them.

The company offered 41 lakh shares in a price band of Rs 70 to Rs 75 per equity share through the IPO.

The company intends to use issue proceeds for expansion of existing business by establishing retail outlets at Tuticorin, Dindigul, Theni, Nagercoil, Tirunelveli, Kovilpatti and Sivakasi, and for renovation of the existing outlet at Madurai; working capital requirement and issue expenses.

Thangamayil Jewellery reported a net profit of Rs 7.31 crore on sales of Rs 246.84 crore in the year ended March 2009.

Madurai-based Thangamayil Jewellery manufactures and retails precious jewellery.