Plans by five jewellery companies to hit the market with initial public offers (IPOs) worth ₹3,840 crore have been delayed, as weak market conditions and bearish sentiment in the primary market are holding back new issuances.
Listing on exchanges will drive tangible business benefits, including strengthening brand trust, enhancing customer and supplier confidence and supporting organised expansion for jewellery companies.
In fact, most of the listed jewellery companies have delivered better returns to investors as the sharp rise in gold prices boosted their revenue despite subdued demand.
Key IPOs in the pipeline
Among the most-awaited, Lalithaa Jewellery Mart plans to raise ₹1,700 crore, and the issuance was approved by SEBI last October. The Chennai-based company’s offer includes a fresh equity issuance of ₹1,200 crore and an offer for sale (OFS) of ₹500 crore by its promoter, Kiran Kumar Jain.
The integrated gold platform, Augmont Enterprises, received Sebi approval in January to raise ₹800 crore. The IPO fresh equity issuance of ₹620 crore and OFS of ₹180 crore by existing investors.
Priority Jewels received SEBI approval last August to mop up ₹540 crore and raised ₹16 crore as pre-IPO placement in February. The Mumbai-based fine jewellery manufacturer supplies to leading jewellers.
Similarly, the Mumbai-based gold jewellery manufacturers, Shankesh Jewellers and Sunil Gold, plan to raise ₹400 crore each through IPOs. While Shankesh Jewellers received SEBI’s nod in February, Sunil Gold, which filed its DRHP in mid-March, is awaiting the final SEBI nod.
Market outlook and expert views
Ratiraj Tibrewal, CEO, Choice Capital, said that despite strong earlier listings by jewellery companies, recent IPO delays indicate a broader market reset.
Gold prices are entering a phase of consolidation alongside overall equity market weakness, even as leading jewellery stocks remain relatively resilient, he said.
Meanwhile, a mismatch between promoter valuation expectations and investor appetite, coupled with cautious institutional participation and tighter liquidity, is leading companies to defer launches despite Sebi approval, he added.
VK Vijayakumar, Chief Investment Strategist at Geojit Investments, said jewellery companies have been doing well even in a weak market, as the industry’s prospects are bright.
The success of IPOs in this segment will depend on the quality of management and the valuation of the stocks, he said.
Dr Ravi Singh, Chief Research Officer, Master Capital Services, said the hesitation of jewellery companies stems less from any fundamental weakness in the sector and more from the prevailing sentiment in the secondary market.
Listed jewellery players such as Titan, Kalyan Jewellers, PN Gadgil Jewellers and Senco Gold have reported healthy earnings and consumer demand remaining structurally intact, he added.