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GRAND PROJECT ON TRIBHOVANDAS

BHIMZI ZAVERI LTD

Student Name: RIKHIL PATEL

Enrolment Number: 1011517080

Submitted to:

Prof. Tirthank Shah

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Sr. No. Title Page No.

1 Introduction to Indian IPO Market 3

2 Brief Introduction About Selected Company 4

3 Objective of The Issue 4

4 Financial Performance Analysis Pre-IPO v/s

Post-IPO

5

5 Shareholding Pattern Pre-IPO v/s Post-IPO 9

6 Share Price Performance 10

7 Conclusion 12

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INTRODUCTION TO THE INDIAN IPO MARKET

INITIAL PUBLIC OFFERING (IPO)-

Initial Public Offering (IPO) is the first sale of stock by the

private company to the public. IPOs are often issued by smaller, younger companies seeking

the capital to expand but can also be done by large privately owned companies looking to

become publicly traded.

The IPO market in India has been developing since the Liberalization of the Indian economy.

It has become one of the leading methods of raising funds for various developmental projects

of different companies. The IPO market in India is on the boom as more and more companies

are issuing equity shares in the capital market. With the introduction of the open market

economy, in the 1990s, the IPO market went through its share of policy changes reforms and

restructurings. The Central government felt the need for a governed environment as few

corporate houses were using the abolition of Controller of Capital Issue (CCI) in market. The

Security Exchange Board of India (SEBI) was established in the year 1992 to regulate the

capital market. SEBI has authority of monitoring and regulating the activities of the bankers to

an issue, portfolio managers, stockbrokers and other intermediaries related to the stock market.

The most active Indian IPO came from industrial, energy and power, financial, and real estate

sectors. As India continue to build up its roadways, power plants and ports, it is expected that

the industrial and power sectors will see the most IPO volume going forward, as these

industries are direct beneficiaries of infrastructure projects.

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ABOUT TRIBHOVANDAS BHIMZI ZAVERI LTD.

Incorporated in 1949, Tribhovandas Bhimji Zaveri Ltd. is India top jewellery retailer. Company

sells gold jewellery, diamond-studded jewellery, platinum jewellery and jadau jewellery

though 14 showrooms in 10 cities across five states. Company's most popular and oldest

showroom is located at Zaveri Bazar, Mumbai. This was established in 1864. Along with in-

house design jewellery, Bhimji Zaveri also offers jewellery from various parts of the world

such as Italy, Turkey and Thailand.

It was awarded the 'Readers Digest Trusted Brand Asia' in the category of 'Jewellery Shop' in

2006, 2007 and 2008. As at March 31, 2012, it had 1,192 employees. In Fiscal 2011, its revenue

from operations was 11,939.31 million on a consolidated basis, of which 72.51% was from the

sale of gold jewellery, 22.08% was from the sale of diamond-studded jewellery and 5.41% was

from sale of other products.

Company has plans to open 43 more showrooms by the end of Fiscal 2015 in 43 cities across

14 states.

Company’s Name Tribhovandas bhimzi zaveri ltd.

Industry Diamond Cutting/Precious Metals/Jewellery

Registered office Mumbai, Maharashtra

Listing May 9th, 2012

Incorporation 1949

Key Persons Shrikant Zaveri (Chairman & Managing Director)

Raashi Zaveri (Whole Time Director)

Binaisha Zaveri (Whole Time Director)

Competitors Gitanjali Gems

PC Jeweller

Alankit

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Issue Detail:

Issue Open: Apr 24, 2012 - Apr 26, 2012

Issue Type: Book Built Issue IPO

Issue Size: 16,666,667 Equity Shares of Rs 10 aggregating up to Rs 200.00 Cr

Face Value: Rs 10 Per Equity Share

Issue Price: Rs. 120 - Rs. 126 Per Equity Share

Market Lot: 45 Shares

Minimum Order Quantity: 45 Shares

Listing at: BSE, NSE

Objective of the Issue:

The objects of Tribhovandas Bhimji Zaveri Ltd IPO are:

1. To finance the establishment of new showrooms

2. To expand this to around 57 showrooms, adding 43 new ones in India.

3. To use about Rs. 20 crores to open 9 new large format showrooms.

4. To finance incremental working capital requirements; and

5. General corporate purposes.

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Financial Performance Analysis Pre-ipo v/s post-ipo

Balance Sheet of Tribhovandas Bhimji Zaveri

Pre IPO Post IPO % Change

Mar-12 Mar-13

EQUITIES AND LIABILITIES

SHAREHOLDER'S FUNDS

Equity Share Capital 50.00 66.7 33.40%

Reserves and Surplus 109.58 343.39 213.37%

Total Shareholders Funds 159.58 447.67 180.53%

NON-CURRENT LIABILITIES

Long Term Borrowings 2.67 19.51 630.71%

Other Long Term Liabilities 0.54 0.54 0.00%

Long Term Provisions 3.87 5.72 47.80%

Total Non-Current Liabilities 7.08 22.82 222.32%

CURRENT LIABILITIES

Short Term Borrowings 200.9 394.48 96.36%

Trade Payables 87.18 171.62 96.86%

Other Current Liabilities 106.47 152.62 43.35%

Short Term Provisions 21.35 26.62 24.68%

Total Current Liabilities 415.90 745.63 79.28%

Total Capital and Liabilities 582.56 1,181.20 102.76%

ASSETS

NON-CURRENT ASSETS

Tangible Assets 47.28 84.17 78.02%

Intangible Assets 1.88 3.45 83.51%

Capital Work-In-Progress 0.71 1.64 130.99%

Fixed Assets 49.86 89.26 79.02%

Non-Current Investments 3.03 3.03 0.00%

Deferred Tax Assets [Net] 3.38 5.19 53.55%

Long Term Loans and Advances 8.77 10.06 14.71%

Total Non-Current Assets 65.04 117.2 80.20%

CURRENT ASSETS

Inventories 501.9 1,027.38 104.70%

Trade Receivables 3 1.76 -41.33%

Cash and Cash Equivalents 5.34 31.85 496.44%

Short Term Loans and Advances 2.96 12.67 328.04%

Other Current Assets 4.32 0 -100.00%

Total Current Assets 517.52 1,073.66 107.46%

Total Assets 582.56 1,181.20 102.76%

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Comment: - Company has invested Rs. 30.52 Cr. in building & factory, Rs. 6.15 cr. in plant

& equipment’s, Rs. 8.03 cr. In furniture & fixture and Rs. 2.46 crore in computers as mentioned

in their IPO’s objective.

Profit & Loss A/c of Tribhovandas Bhimji Zaveri

Particulars Pre

IPO

Post

IPO % Change

Mar-12 Mar-13

INCOME

Revenue from Operations 1,380.39 1,649.42 19.49%

Other Operating Revenues 5.08 8.91 75.39%

Total Operating Revenues 1,385.47 1,658.33 19.69%

Other Income 1.61 5.88 265.22%

Total Revenue 1,387.08 1,664.23 19.98%

EXPENSES

Cost of Materials Consumed 971.89 1,563.73 60.90%

Purchase of Stock-In Trade 248.87 262.9 5.64%

Changes in Inventories of FG, WIP and Stock-In Trade -78.36 -48.03 -38.71%

Employee Benefit Expenses 45.75 55.1 20.44%

Finance Costs 31.48 21.49 -31.73%

Depreciation and Amortisation Expenses 5.26 8.04 52.85%

Other Expenses 75.27 109.71 45.76%

Total Expenses 1,300.15 1,540.65 18.50%

Profit/Loss Before Tax 86.93 123.56 42.14%

Current Tax 31.3 42.03 34.28%

Deferred Tax -1.63 -1.8 10.43%

Tax for Earlier Years 0.06 1.66 2666.67%

Total Tax Expenses 29.73 38.56 29.70%

Profit/Loss for The Period 57.19 85.00 48.63%

Comment: - Here we can see that the excessive amount proceedings, company has given as

loan, Rs. 9.71 cr. as a short term and 1.29 cr. as a long term. So, this investment is able to

generate additional income from other sources of Rs. 4.27 cr. as compare to previous year.

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Financial Ratios

Particulars Mar-12 Mar-13 % Change

Basic EPS (Rs.) 11.44 13.04 13.99%

Net Profit Margin (%) 4.12 5.12 24.27%

Return on Capital Employed (%) 34.31 19.5 -43.17%

Return on Net worth/Equity (%) 35.84 20.72 -42.19%

Total Debt/Equity (X) 1.28 1.01 -21.09%

Current Ratio (X) 1.24 1.44 16.13%

Quick Ratio (X) 0.04 0.06 50.00%

Earnings per share of the company has increased by 13.99%. So company is able to

generate more revenue for its shareholder.

RONW of company gets reduced by 42.19% as they didn’t utilised entire money at present.

ROCE also get reduced by 43.17%. As they purchased the assets as of now, so they are not

able to generate revenue from it. But in near future when the showrooms get started then

the company would be able to generate revenue from it.

Liquidity position of company is good as they have current loans and advances and cash

reserve with them.

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5. Shareholding Pattern

Particulars

Pre IPO Post IPO

2012 2013

No of Shares No of Shares

Promoters

Individuals 46749775 4,67,49,775

Body Corporates 27,00,000 27,00,000

Public

FII 92,23,447

Resident Individuals 550225 45,42,741

Corporate Bodies 31,08,458

NRI 2,56,740

HUF 50,905

Clearing Members 31,572

FI 3,029

Trusts

Mutual Funds

Total 50000000 66666667

Comment-

There is no change in promoter’s stake

FII, Body Corporates and NRI are attracted towards company and purchased 13.84%,

4.66% and 0.39% share in the company.

So, with that we can say that investors are trusting the company and its business model.

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6. Share Price Performance

Listing Date

9th May, 2012

As on

30th June 2016

Open Price 115.00 Open Price 73.70

Close Price 111.20 Close Price 75.65

High Price 119.80 High Price 76.80

Low Price 110.80 Low Price 73.30

Returns

RETURNS RETURNS

Year Price Returns Year Price Returns

2012 111.2 cut off 120

2013 229.45 106.34% 2012 111.2 -7.3%

2014 131.15 -42.84% 2013 229.45 106.3%

2015 148.05 12.89% 2014 131.15 -42.8%

2016 75.67 -48.89% 2015 148.05 12.9%

CAGR -9% 2016 75.67 -48.9%

CAGR -9%

Chart

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In 2012 if a person has invested in shares then he has incurred a loss of 42.8%.

In 2013 if a person has invested in shares then he has gained a profit of 106.3%.

In 2014 if a person has invested in shares then he has incurred a loss of 42.8%.

In 2015 if a person has invested in shares then he has gained a profit of 12.9%.

In 2016 if a person has invested in shares then he has incurred a loss of 48.9%.

If a person has invested in IPO, then he will be able to get return of -9%.

So price of TBZ is trading at discount because of strike due to imposition of 1% excise duty.

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Conclusion

This year’s performance was impacted by the nationwide agitation by gems and jewellery

industry in protest against imposition of 1% excise duty on jewellery sales. Even in these

challenging times company is able to improve gross margins by 3.64% and keep operating cost

under strict control. Interest cost during the year declined by 6% to Rs. 12.8 crore. During the

year company incurred a hedging loss of Rs. 13.6 crore on account of rising gold prices.

Looking into the next year, company is optimistic of an improved operational and financial

performance.

Company expect to see growth in jewellery sales in FY2017 on the back of redemptions under

the re-launched Kalpavruksha Scheme, expectations of a good monsoon, longer wedding

season and overall improvement in discretionary demand.

Company is continuing expanding their reach and presence across India through mix of own

and franchise stores.