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IPO Details

• IPO Opening Date: July 25, 2025
• IPO Closing Date: July 29, 2025
• IPO Size: Aggregating up to Rs 360.11 crore Fresh Issue & OFS: Entirely a fresh issue of 1,80,96,000 equity shares
• IPO Price Band: Rs 189 to Rs 199 per equity share
• Minimum Bid Lot: 75 shares
• Allocation to Investors:
• QIB (Qualified Institutional Buyers): 36,19,200 shares
• NII (Non-Institutional Investors): 27,14,400 shares (21.43%)
• RII (Retail Individual Investors): 63,33,600 shares (50.00%)
• Lead Manager: Choice Capital Advisors Pvt Ltd
• Registrar: Bigshare Services Pvt Ltd

About the Company History:

• Incorporated in 2003 as a partnership firm named M/s Shanti Gold, later converted into a public limited company, Shanti Gold International Limited, on November 1, 2013. Main Products/Services: Manufactures high-quality 22kt CZ casting gold jewellery, including bangles, rings, necklaces, and complete sets. All products are hallmarked by the Bureau of Indian Standards (BIS). Operates on a B2B model, supplying jewellery to various stores. Plans to introduce a new line of machine-made plain gold jewellery.
• Sales & Manufacturing Units: Has a sole manufacturing facility in Mumbai (Andheri Manufacturing Facility) with an installed capacity of 2,700 kg per annum. Is setting up a new manufacturing facility in Jaipur (Proposed Jaipur Facility) with an additional 1,200 kg per annum capacity.
• Employees: As of May 31, 2025, the company had 222 employees on its payroll and an additional 100 contract workers.
• Promoters: Pankajkumar H Jagawat, Manojkumar N Jain, and Shashank Bhawarlal Jagawat.
• Branches/Network: Has a domestic presence in 15 states and 2 union territories across India, with operations in key cities like Mumbai, Bangalore, Chennai, and Hyderabad, and branch offices in Tamil Nadu, Andhra Pradesh, Karnataka, Telangana, Gujarat, and Madhya Pradesh. Aims to expand its global footprint in markets including the USA and UAE, and currently exports to UAE, Singapore, Qatar, and USA.

Financials Shanti Gold International:

Consolidated Financials (₹ in Crores)

Post IPO Market Cap: Rs. 1,434.71 crore P/E FY24: 53.35 times P/E FY25: 25.68 times (annualized)

The company has demonstrated significant growth in both its top and bottom lines over the last three fiscal years. Profitability margins have also shown a consistent upward trend, reflecting enhanced operational efficiency. This growth trajectory is notable given the competitive nature of the gold jewellery manufacturing sector.

Anchor Investors

Shanti Gold International raised ₹108.03cr from 15 anchor investors ahead of its IPO, with no allocation to domestic mutual funds. The top 10 anchor investors and their % allocation are: Societe Generale-ODI (9.27%), Wealthwave Capital Fund (9.27%), Rajasthan Global Securities (9.27%), Astorne Capital VCC Arven (9.27%), Shine Star Build Cap Pvt Ltd (9.27%), Meru Investment Fund PCC-Cell 1 (9.27%), J4S Venture Fund-I (9.27%), Vijit Growth Fund (8.43%), Founders Collective Fund (7.61%), Smart Horizon Opportunity Fund (6.78%).

The remaining investors include Swyom India Alpha Fund, Sunrise Investment Opportunities Fund, Saria Holdings Mauritius Ltd, Kora Investment Fund Ltd, and Aegis Investment Fund PCC Ltd, each with a lower individual allocation. 

Salient Points

• Use of Funds: The fresh issue proceeds will be used for funding capital expenditure requirements of Rs 46.29 crore for the Jaipur facility, Rs 200 crore for working capital needs, Rs 17 crore for repayment/pre-payment of certain borrowings, and the remaining for general corporate purposes.
• Business Scenario: The company operates in a highly competitive and fragmented segment of the gold jewellery market. The Indian jewellery market is expected to grow by 13.1% year-on-year to ₹ 4,653 billion in CY2024, with a compounded annual growth rate of 9.7% between CY2023 and CY2029.
• Business Operations: The company has an in-house manufacturing setup, overseeing design, production, and packaging to maintain quality control, utilizing advanced machines and outsourced labor for tasks like manual stone setting. Its Mumbai facility had a 58% capacity utilization in FY2025, with production growing at a 4% CAGR in the past two fiscals. Revenue Model: Primarily a B2B manufacturer and supplier of gold jewellery.
• Business Strategy: Aims to expand its geographical presence in North India and its global footprint in markets like the USA and UAE. Plans to establish a new manufacturing facility in Jaipur and introduce a new line of machine-made plain gold jewellery. Leverages long-standing relationships with existing clients and its experienced promoters to drive growth.
• Risks: The company faces risks from ongoing legal proceedings, including criminal and tax disputes, involving itself, its directors, and promoters. There are also noted issues with some statutory dues remaining outstanding beyond six months.
• Litigations: Includes outstanding legal proceedings and direct and indirect tax disputes. As of March 31, 2025, contingent liabilities amounted to Rs 146.20 million, covering VAT, GST, Income Tax, TDS in dispute, and guarantees. Revenue Split by Region: In FY2025, approximately 72.76% of revenue came from South India, 21.88% from the Rest of India, and 5.36% from exports. Roughly three-fourths of its business is generated from South India.
• Export/Import: Exports in FY2025 contributed to 5.36% of total revenue, with key markets being UAE, Singapore, Qatar, and USA.
• Capacity Utilisation: The Mumbai facility’s capacity utilization was 58% in FY2025.
• Expansion: The new Jaipur facility will add 1,200 kg per annum capacity, increasing the total installed capacity to 3,900 kg per annum.
• Order/Clients: Served 455 customers in FY2025. Top 5 and Top 10 customers contributed about 23% and 34% of total revenue, respectively. Has established clients for 15-20 years, including Lalita Jewellery, Joyalukkas, and Alukkas Jewellery, serving over 400 customers.
• Working Capital & Inventory Days: The company intends to allocate Rs 200 crore from IPO proceeds for working capital requirements. Inventory as of March 31, 2025, was Rs 148.58 crore, and its inventory turnover ratio is a healthy 7.5x. Days Working Capital for FY2025 was 109 days, down from 124 days in FY2024.
• Receivables Trend: Trade receivables increased to 1,816.46 million in FY2025 from 782.31 million in FY2024.
• CAGR Profits/Margins Last 3 Years: Revenue grew from Rs 679.4 crore in FY2023 to Rs 1,106.41 crore in FY2025, with EBITDA margin improving from 6.28% to 8.28%. Net profit soared by 108% in FY2025 compared to FY2024.

Peers Comparison with Listed Industry Peers

Management Commentary Pankajkumar H Jagawat, CMD: The IPO proceeds are intended primarily for working capital, as the business is working capital oriented. He noted no issues with selling jewellery, citing fixed clients for 15-20 years including Lalita, Joyalukkas, and Alukkas, serving over 400 customers, and therefore does not perceive significant competition.

CFO: Highlighted significant growth in both top and bottom lines from FY2023 to FY2025. Attributed this growth to key levers such as design innovation and differentiation as a USP, healthy volume growth aided by price surges, and a skilled set of craftsmen. Expressed positivity regarding the company’s financial performance and mentioned that margins have consistently improved from around 4.5% to almost 8% in FY2025. He anticipates further margin sustenance and improvement due to scaling operations, cost optimization, and digitalization, as well as diversification into different product mixes and pricing strategies. Regarding debt, he stated that the company is comfortably positioned at 1.6 leverage, which is expected to decrease to less than half a percent post-IPO, providing a strong foundation for future expansion and growth through leverage.

Opinion:

I intend to apply to the IPO even as pricing is bit aggressive for a B2B player. Promoters have a listed entity Utssav CZ Gold Jewels Ltd which has focus on light weight jewelry. I do not expect significant listing gains as there are limits on Net margin in a B2B jewelry manufacturer. Small size of IPO could see good subscription.

Post IPO equity capital: Rs. 72.10 crore, P/E for FY24: 53.35 times, P/E FY25: 25.68 times

Investment Thesis or Rejection Thesis:

• The company has demonstrated consistent growth in revenue and improved operational efficiency.
• The company has posted growth in its top and bottom lines for the reported periods. This has been aided by Gold prices as well.
• The issue appears aggressively priced based on recent financial data.
• Company’s inventory turnover ratio of 7.5x is healthy.
• Debt equity ratio of 1.4:1 will moderate to 0.4:1 post IPO.
• Despite B2B operations, company clocks good net margins
• Good working capital management.
• There are other B2B players available at same or lower valuation.
• This post is exploratory and educational purposes only.
• Standard disclaimer: I am not a SEBI registered analyst and above analysis is for educational purpose only. Iam a postgraduate in engineering & Management . I have in the past cleared some exams like NISM-Series-V-A: Mutual Fund Distributors Certification, NISM-Series-X-A: Investment Adviser (Level 1) Certification and NISM-Series-X-B: Investment Adviser (Level 2) Examination. This post is my view on the subject matter and is only academic and exploratory in nature. It is not meant to influence investment decisions of investors. I may have bias/vested interest in covered Stock/Mutual Funds/NCD etc. due to my own investment or leaning. Further my understanding of the areas on which I write may be imperfect or incomplete and data could be wrong due to limited time and resources at my disposal. Do check the data from company’s RHP and exchanges before making any decision. Please do your own due diligence as stock market/MF investments have high degree of inherent risk.