Ashapuri Gold Ornament Limited is all set to come up with a second round of public offer, with a goal to raise funds of INR 30 crores. It is already listed on BSE SME Platform.
Issue Details
Company Strengths
Good reputation and trust in the market
Most designs are very antique and unique
Showroom located at a prime location – C.G Road, Ahmedabad
Understanding of Customer Preferences
Supplier to Reputed Retail Show Rooms (Companies)
Experienced promotors with two decades of experience in jewelry industry.
Weakness
Limited
geographical area of Operations
Family
owned unit resulting in Lack of Professionalism.
Uncertainty
in market fluctuations
Opportunities
Started in house manufacturing unit
Tie-up with large chain jewelry retail stores for supply of jewelry
Recruitment of sales team to cover the wide region.
Threats
May face competition from organized and unorganized sector.
Dealing in lifestyle products, economic slowdown will reduce the demand and hamper the growth of the Company.
Fluctuation in raw material, since the prices are going up and there‘s volatility in prices of gold.
Valuation
The company reported its EPS at INR 1.15 for the period ending on September 2020. The company is getting listed at a PE of 35.2x on the basis of annualized FY 21 EPS.
Utilization of Funds
Background highlights of the Company in brief
Ashapuri Gold Ornament Ltd was originally incorporated as Ashapuri Gold Ornament Private Limited, as a private limited company under the provisions of Companies Act, 1956.
Subsequently, it was converted in to a public limited Company pursuant to a special resolution passed by the company’s shareholders at the EGM held on January 09, 2019 and consequently the name was changed to Ashapuri Gold Ornament Limited.
On March 27, 2019, shares of the company got listed and traded pursuant to Initial Public Offering on SME Platform of BSE Limited.
The company is reckoned as one of the prominent manufacturer and wholesaler of gold jewelry.
It has been 20 years of this remarkable journey serving jewelers from metro cities to even many parts of urban locations and unrivalled quality of jewelry.
The company’s manufacturing expertise, large inventory of designs & high quality of service has made it possible to be in league of top jewelry suppliers.
The company’s exquisite collection is spread across the Indian markets.
The Company is engaged in the business of wholesale trading of Jewelry. The Jewelries are manufactured on Job-work basis at Ahmedabad and Rajkot.
It has a showroom of 2945 sq. feet on prime location of C.G. Road, Ahmedabad, the newly developed main market for buying Gold and Diamond Jewelry.
The Company has also purchased premises at Navrangpura, Ahmedabad, measuring 2194.02 sq. ft for starting manufacturing unit in the month of March 2019.
The company’s product portfolio includes Wedding Jewelry, Festive Jewelry, Rings, Chain, Earrings, Ear Chain, Nose-rings/Nose pins, Waist belts, Mangalsutra, Anklet, Zuda, Toe Ring, Pendant Set/ Pendant, Bracelet and Bangles.
It has appointed sales team for different region/city like Delhi, Rajasthan, Punjab, Uttar Pradesh, Kolkata, Chennai, Bangalore, etc for further expansion of business.
As on November 30, 2020, the Company had employed 108 employees (including skilled, semi-skilled and unskilled employees).
Briefing about directors & Key Managerial Personnel
Prices of base metals such as Aluminum (+4.1%),
Copper (+9.2%), Iron Ore (+0.7%), Lead (+1.7%) and Zinc (+1.1%) continued its
uptrend for the third consecutive week, with bulls making their mark in the
COMEX Market on the back of buoyant demand. As for precious metals, both, gold
and silver rallied on Monday and Tuesday, however, they lost all the gains
during the rest of the week, losing 0.5% and 1.0% respectively as compared to
the closing prices of the week before.
Gold and Silver made new lows of $1,734 and
$26.67 respectively on Friday as the 10 year US bond yields continued to rise,
returning to the pre-pandemic levels of last year after FED Chairman vowed to
keep the accommodative policy to support economic recovery. US Dollar as well
continued to become stronger, being the best alternative to gold amid a crash
in equity indices in the second half of the week.
Crude oil prices reached to the highest levels
in more than 11 months on Thursday, after the U.S. Federal Reserve assured that
interest rates would stay low for a while and also supported by lower crude
production in the US, after a rare winter storm in Texas. However, the prices
are expected to weaken, as the OPEC Plus group will discuss a modest easing of
oil supply curbs from April.
We expect the precious metal prices to trade volatile
in sideways to marginally negative trend in the current week. The investors
will have to keep an eye on the most important data – the Non-farm Payrolls
report and the Average Hourly Earnings portion during the week, which has an
inverse relationship with gold. Along with that, the COVID-19 vaccination drive
expansion may also continue to weigh on gold and silver.
For the week, we expect gold in COMEX market to be in the range of $1,680 to $1,790, while silver is expected to be in the range of $26.2 to $28.0. Whereas, for bullion market traders, we assume gold futures to trade in the range of 45,550 – 45,300 to 46,500 – 46,800.
