Augmont in talks with 8 MFs for gold, silver ETF liquidity ahead of ₹825 crore IPO
The IPO-bound company will deposit bullion in the authorised vaults of MFs as per its instructions to generate ETF units for trading on the stock exchanges
Augmont Enterprises is in discussions with eight mutual funds to provide liquidity and manage physical redemptions of their gold and silver exchange traded funds. The company will deposit bullion in authorized vaults of the mutual funds as per their instructions to generate ETF units for trading on the stock exchange platform. To facilitate this process, the mutual funds have appointed market makers who purchase gold and silver from Augmont to deposit in vaults, thereby creating ETF units.
Augmont Enterprises operates across various segments of the value chain, including spot trading, refining, digital gold, jewelry manufacturing, and EMI jewelry. Their online spot trading platform currently has 5,200 registered jewellers who pay margins before taking positions and can receive bullion delivery within two days from 20 delivery centers across the country. The company incorporates its charges in the gold price to avoid any confusion.
With 4.9 crore registered customers, Augmont provides EMI options for purchasing gold jewelry, ranging from 1 gram to 9 grams. Consumers are required to pay 20% upfront and the remaining amount in 3 to 9 installments. The company also buys back old jewelry from NBFCs for refining at their own refinery. Augmont plans to raise ₹825 crore through a fresh share issuance of ₹620 crore alongside the promoter Kothari family selling shares worth ₹205 crore via an offer-for-sale (OFS).
The price band for the issue is set at ₹750-788 per share, valuing the company at ₹7,200 crore. The IPO will open for public subscription on August 21, with shares expected to begin trading on the stock exchanges from August 31. Retail investors will need to invest a minimum of ₹14,972, with a maximum investment limit of ₹1,94,636.
The company intends to utilize the proceeds from the fresh shares issued for future working capital requirements, such as inventory procurement, maintenance, and scaling up, as well as funding advance margin requirements for inventory procurement.
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