Joyalukkas, ‘Jewellery’ Store Chain, Has Withdrawn Its IPO Of Rs 2,300 Crore; While ED Raided Many Of Its Offices
The Enforcement Directorate (ED) raided many offices of the well-known 'jewellery' business Joyalukkas.
Joyalukkas postponed their IPO just one day before the ED raided Joyalukkas’ multiple offices in Kerala and also searched the company’s owner’s house. At the time of the cancellation of the IPO, Joyalukkas gave the usual reasons: bad market conditions, a gold price hike, etc. However, whether this is a true reason or not is debatable because the ED raided Joyalukkas’ offices for hawala transactions and a money laundering case.
The initial public offering (IPO) of Kerala-based Jewellerstore Joyalukkas India has been postponed. This is the company’s second postponement of a share sale after submitting papers to the Securities and Exchange Board of India. It filed an IPO filing for Rs 650 crore in 2011, but it was rejected.
Alukkas Varghese Joy, Joyalukkas’ managing director, justified the most recent change in the strategy as a result of adverse market conditions, office relocation, and the company’s increased profitability. He also stated that the IPO will take place in the fiscal year 2024.
“Due to several minor issues, we have shelved the IPO.” We believe that the market circumstances are not favourable. However, we have progressed over the past year, and our numbers have gone up. “We are also moving several of our offices to India,” Joy said.
Joyalukkas withdrew its Rs 2,300 crore IPO on Tuesday, citing information from the market regulator Securities and Exchange Board of India’s (SEBI) website. According to a company official, the firm needed more time before going public to undertake some important changes to its financial performance. The objective, according to Baby George, Joyalukkas’ CEO, is to resubmit the IPO papers “as quickly as feasible, subject to market circumstances.”
The benchmark BSE Sensex returned 4.33 per cent in the most recent year. According to Joy, if the company’s financial results improve, it may reapply for the IPO. We are unable to comment on the IPO pricing at this time; it should happen in the fiscal year 2024.
Joy emphasized that the decision had nothing to do with the volatility of gold prices, which reached a fresh high of Rs 57,930 per 10 gm last month before plummeting as a result of the US Federal Reserve’s decision to boost interest rates even more. According to Joy, all Indian gold enterprises had good years in 2022, with demand remaining strong despite high expenses. The country’s “total consumption of gold has increased,” he asserted.
According to the World Gold Council, the demand for gold increased globally by 18% in 2022 over the previous year, reaching 4,741 metric tons, with the fourth quarter showing particularly robust growth.
While the consumption of jewellery decreased by 3% to 2,086 tons. According to the council, a dramatic local price increase in the latter weeks of December prevented Indian consumer demand from reaching the robust levels of 2021.
As a result of the pandemic, Joyalukkas’ development goals in India have slowed down during the last couple of years. To open eight showrooms, the business had planned to use Rs 463.9 crore of the IPO proceeds.
This year, Joy added, “We want to open around 10 showrooms in India, especially in the northern regions of the nation.” The firm has 45 showrooms abroad, especially in West Asia, and 85 shops in India; Joyalukkas made a net profit of Rs 473 crore in FY21.
The ED searches Joyalukkas Jeweller stores for possible FEMA violations.
The Enforcement Directorate (ED) raided many offices of the well-known Jeweller business Joyalukkas. This comes only one day after the Jewellerbehemoth halted its Rs 2,300 crore initial public offering (initial public offering).
According to the source, the central agency searched multiple offices of the Jeweller company, which has its headquarters in the state’s Thrissur district, as part of an investigation into money laundering. The searches were conducted in response to suspicions of breaches of the Foreign Exchange Management Act (FEMA) and widespread hawala financial transfers to Dubai. Five properties of the Jeweller company were searched, including the top managing director’s 50,000-square-foot home in Shoba City, Thrissur. According to reports, hawala transactions worth more than Rs 305 crore are being investigated.
Documents, electronic devices, and computer equipment were reportedly taken. Before the process of questioning begins, the gathered information and pieces of evidence will be evaluated according to sources.
In 2022, the company submitted its draft red herring prospectus (DRHP) to the market regulator to raise funds through a public offering. According to the company’s draft prospectus issued in March 2022, the initial share sale earnings were to be utilized to repay certain creditors and develop more outlets. Joyalukkas is one of the largest Jewellerstores in the country, with 85 showrooms in 68 locations.