PNGS Reva Diamond
IPO Size: Rs. 380 cr, Entirely Fresh Issue
- Rs. 287 cr for 15 new store addition, under COCO model, by FY28E
- Rs. 35 cr for marketing
Price band: Rs. 367-386 per share
M cap: Rs. 1,224 cr, implying 31% dilution
- Only 10% allocated for retail investors and 75% for institutions, as networth was negative, as of 31.3.24
IPO Date: Tue 24th Feb to Thu 26th Feb 2026, Listing Wed 4th Mar 2026
Grey Market Premium (GMP): We are strongly against ‘grey market premium’ as it is an unofficial figure, against SEBI guidelines.
Regional Diamond Jeweler
PNGS Reva Diamond Jewellery is listed jeweler PN Gadgil’s diamond business, separated a year ago, in Jan 2025, at a ‘fair value’ of Rs. 162 cr. PN Gadgil is company’s corporate promoter, holding 19.24% stake of total 87.45% pre-IPO promoter holding.
Untested Waters
The Pune-headquartered company operates 34 stores in Maharashtra, Gujarat and Karnataka, with Maharashtra alone contributing 97% of Rs. 300 cr revenue.
Of these, 33 stores are operated under ‘shop-in-shop’ model at corporate promoter’s stores, accounting for ~90% of revenue, and only 1 store is company owned and company operated (COCO). Thus, PNGS Reva is highly dependent on PN Gadgil. It now plans to add 15 new COCO stores, from IPO proceeds, but this is an unproven path with high execution risks.
Poor Financials
FY25 revenue was Rs. 258 cr, with PAT of Rs. 59 cr. But on H1FY26 revenue of Rs. 156 cr, PAT declined to Rs. 20 cr, leading to an EPS of Rs.9. In H1FY26, inventory rose from Rs. 179 cr as of 31.3.25 to Rs. 313 cr as of 30.9.25, without proportionate increase in revenue. Thus, inventory turnover ratio slipped from 1.4x in FY25 to 0.5x in H1FY26. This is the single most important parameter to judge any retail business, but has been on a decline. Even 1.4x inventory turn is not optimal, with listed operating at over 2x.
Expensive Pricing
Corporate promoter P N Gadgil, with 13x revenue of PNGS Reva and nearly 3x inventory turnover ratio, is ruling at a PE multiple of 20x. This makes IPO PE of 20x highly expensive. Let alone company’s dependance on parent.
In the peer comparison table on page 151 of RHP, H1FY26 financials of listed peers are surprisingly not disclosed.
22nd Feb 2026 at 06:53 pm