PC Jeweller To Allot 51.7 Crore Shares To 14 Banks For Rs 1,510 Crore Debt Repayment

New Delhi-headquartered PC Jeweller Ltd. announced on Monday that its Board of Directors has approved the allotment of 51.7 crore equity shares to a consortium of lenders to settle an outstanding debt of Rs 1,510 crore.

According to an exchange filing, the company's board has approved the preferential allotment of 51,71,14,620 shares on a private-placement basis. Each share has a face value of Re 1 and an issue price of Rs 29.20 per share.

The decision comes as part of the Joint Settlement Agreement dated September 30, 2024, entered into among the company and a Consortium of Lenders comprising 14 banks. The lenders include State Bank of India, Union Bank of India, Punjab National Bank, Axis Bank Ltd., IndusInd Bank Ltd., Bank of India, IDBI Bank Ltd., Karur Vysya Bank, Kotak Mahindra Bank, Indian Overseas Bank, Canara Bank, Indian Bank, Bank of Baroda, and IDFC First Bank.

The new equity shares allotted to the consortium lenders will rank pari-passu with the existing equity shares of the company. PC Jeweller had opted for a one-time settlement (OTS) for its outstanding dues with the consortium. The terms and conditions of the approved OTS include cash and equity components payable under the settlement, the release of securities, and the mortgaged properties involved in the agreement.

The debt repayment move also reflects the significant financial improvement shown in PC Jeweller's third quarter results. The company reported a remarkable 15.9 times increase in revenue from core operations, reaching Rs 639 crore in the October-December quarter, compared to Rs 40.1 crore in the same quarter last year. The surge in revenue is attributed to strong jewellery demand during the festive and wedding season, which significantly boosted sales.

The company's quarterly EBITDA turned positive, standing at Rs 112 crore against an EBITDA loss of Rs 73 crore in the corresponding period of the previous year. The EBITDA margin stood at 17.5 per cent, indicating robust profitability. Furthermore, PC Jeweller reported a net profit of Rs 148 crore, a stark contrast to the net loss of Rs 198 crore recorded in the previous year.

However, the company's total expenses also saw a sharp rise of 119 per cent year-on-year (YoY), reaching Rs 535 crore compared to Rs 244 crore in the same quarter of the previous financial year. The increase in expenses was primarily driven by a rise in the cost of materials consumed and an uptick in stock purchases to meet surging demand.

Established in 2005, PC Jeweller Ltd. has grown to become a prominent player in the Indian jewellery market. The company specializes in the manufacture, export, wholesale, and retail of gold and diamond jewellery. With a strong retail presence, PC Jeweller operates a network of over 80 showrooms across 50 plus cities in India.