Jewellery retailer Senco Gold & Diamonds plans to reduce its short-term debt and fuel its expansion plans, leveraging the funds raised through its recently concluded qualified institutional placement (QIP), says MD & CEO Suvankar Sen. The company raised ₹459 crore via the QIP. Its short-term debt, currently at around ₹1,500 crore, primarily includes gold loans.
Nearly ₹1,000 crore of the total loans is in the form of metal gold loans, while the remaining ₹500 crore comprises cash credit. Senco plans to open 18-20 stores annually, with a mix of 8-10 company-operated stores and the remaining through franchise partnerships. This initiative aims to deepen its presence across tier-2, tier-3, and tier-4 towns, particularly in the eastern and northern regions.
Out of the ₹459 crore, about ₹150 crore will be used for the new stores. The company recently established Sennes Fashion as a wholly-owned subsidiary of Senco, focusing on lab-grown diamonds, leather, and perfumes. Sen said the non-jewellery segment will not require investments of more than ₹40-50 crore, which will be deployed gradually over a period of time.
The immediate focus will be on funding inventory for existing high-performing stores and new stores that are set to open. The company has a market capitalisation of ₹9,027 crore. Its shares have risen 54% over the last year.
Also Read | Gold prices edge higher as markets await Fed rate decision: Should you buy, sell or hold?.
