 "This jewellery stock hit the 5th straight upper limit; up 95% from June low")
Shares of PC Jeweller were locked in the upper circuit for the fifth straight day, up 5 per cent at Rs 85.83, hitting 19-month high on the BSE in Friday’s intra-day trade amid heavy volumes. The stock was trading at its highest level since January 2023. A combined 7.1 million shares had changed hands and there were pending buy orders for 1.57 million shares on the NSE and BSE at 02:14 pm.
In the past five trading days, the stock of jewellery company rallied 28 per cent. It has bounced back 95 per cent from its previous month low of Rs 44.10 touched on June 5.
The Finance Minister, Nirmala Sitaraman in the Budget 2024-2025 on Tuesday announced a reduction on basic custom duty on gold and silver from 10 per cent to 6 per cent. Analysts expect Gold and Silver prices to go down post duty cut and demand to rise.
Meanwhile, PC Jeweller informed that the company approved the one time settlement (OTS) proposal sent by Bank of Baroda and Canara Bank.
In an exchange filing, PC Jeweller said that Bank of Baroda vide its letter dated July 18, 2024, which was received by the company on July 20, 2024, has conveyed its approval to the OTS proposal submitted by the company.
In a separate filing, the company informed that Canara Bank vide its letter dated July 24, 2024 has conveyed its approval to the OTS proposal submitted by the company.
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Earlier, IndusInd Bank, Punjab National Bank and Union Bank of India have conveyed its acceptance to the OTS proposal submitted by the company.
PC Jeweller said that the company had opted for OTS to settle the outstanding dues. The terms and conditions of approved OTS include cash and equity components payable under settlement, release of securities and mortgaged properties etc.
The internal authorities of three banks, namely, State Bank of India (Lead Bank), Karur VysyaBank and Axis Bank, have given their acceptances to the company’s offer in Q4 FY2024. The offer is under consideration with the competent authorities of the remaining consortium banks and the company is positive and confident of receiving their acceptances soon.
Meanwhile, on July 13, the board of PC Jeweller approved raising of funds up to Rs 2,705 crore by preferential issue of fully convertible warrants.
The board approved the issuance and allotment of up to 481.3 million fully convertible warrants, carrying a right exercisable by proposed allottees to subscribe to one equity share (having face value of Rs 10 each) per warrant by way of preferential allotment on private placement basis to Promoter Group and Non‐Promoter, Public Category at an issue price of Rs 56.20 per warrant.
The board also approved raising of funds by issue of equity shares by way of a rights issue to the eligible equity shareholders of the Company. This issue size will be up to Rs 1,500 crore subject to necessary regulatory, statutory and other approval(s), if any, the company said.
Meanwhile, in March 2024 quarter (Q4FY24) PC Jeweller’s domestic turnover was reduced to Rs 48.49 crore as against a turnover of Rs 173.24 crore achieved in Q4FY23.
The company said this fall in revenue was mainly on account of the various litigations filed by the banks against the company in various legal cases including the Hon’ble NCLT.
Due to the litigations and negative promotion about the company, the customer sentiments towards the company’s future and existence got affected adversely. As a result of which, although the company’s show rooms were operational, but the quantum of operations was very low/negligible. This led to a fall in the company’s revenue and its operational levels as well. This reduction in operations has resulted in losses at EBIDTA as well as PBT level for the company for the FY 2024.
The company is also revamping all other aspects of its business operations such as preparing to launch new jewellery collections, revamping its franchisee business, cost optimization etc.
All the above efforts have led to an increase in the company’s operational levels, its revenue, customer footfalls and most importantly, regaining its customer’s trust and brand goodwill in Q1FY25, PC Jeweller said in its investor presentation.
With the rise in its sales and operational levels and positive response from its customers, the company is confident of regaining its lost market share and business and of showcasing good performance in Q1FY25 and in the quarters to follow.