The initial public offering (IPO) of Deepa Jewellers, a Hyderabad-based company specializing in gold and diamond jewelry, commenced its subscription period on Tuesday, September 1. The company aims to raise Rs 460 crore through this offering, with shares available in a price band of Rs 168-177 apiece. Investors can apply for a minimum of 84 equity shares.
IPO Details and Fund Utilization
The Deepa Jewellers IPO will conclude on Thursday, September 3. The Rs 460 crore issue comprises a fresh share sale of Rs 250 crore and an offer-for-sale (OFS) of up to 1,18,48,340 equity shares, valued at Rs 210 crore. The net proceeds from the fresh issue are earmarked for funding long-term working capital requirements, specifically for the procurement, maintenance, and scaling up of inventory, alongside general corporate purposes.
Established in 2016, Deepa Jewellers is engaged in the retail and wholesale trading of gold and diamond jewelry. They offer a diverse range of designs, including rings, necklaces, earrings, bangles, and customized ornaments, crafted with quality materials and skilled workmanship.
Anchor Investors and Financial Performance
Ahead of its public debut, Deepa Jewellers successfully raised Rs 137.91 crore from 15 anchor investors by allocating 77,91,749 equity shares at Rs 177 per share. Notable anchor investors included Motilal Oswal Finvest, Whiteoak Capital Equity Fund, 360 One Equity Opportunities Fund, Unifi MF, and Nomura Singapore.
For the financial year ended March 31, 2026, Deepa Jewellers reported a net profit of Rs 104.79 crore on a revenue of Rs 1,927.73 crore. The company demonstrated strong growth between FY24 and FY26, with revenue, EBITDA, and PAT recording CAGRs of 37.1 percent, 102.3 percent, and 107.5 percent, respectively. At current valuations, the company commands a market capitalization of just over Rs 1,700 crore.
Allocation and Grey Market Premium (GMP)
The IPO has reserved 50 percent of the net issue for qualified institutional bidders (QIBs), while non-institutional investors will receive 15 percent. Retail investors have a 35 percent quota. As per the latest reports, Deepa Jewellers was commanding a grey market premium (GMP) of Rs 55 per share, indicating a potential listing gain of approximately 31 percent for investors.
Brokerage Recommendations
Several brokerage firms have weighed in on the Deepa Jewellers IPO:
- SBI Securities: Subscribe
Highlighting the company's robust financial growth (FY24-FY26 CAGR) and strategic move to establish an in-house manufacturing facility to improve margins and efficiency, SBI Securities recommended subscribing for a long-term investment horizon. - Swastika Investmart: Neutral
While noting the attractive valuation compared to peers and high RoNW, Swastika Investmart expressed caution due to high customer concentration (top 10 customers contribute 64.67% of FY26 revenue), exposure to regional design shifts, and increasing receivables impacting the operating cycle. They suggested considering it for listing gains but advised caution for long-term. - Master Capital Services: Subscribe for long-term
Master Capital emphasized Deepa Jewellers' strong position to benefit from rising organized jewelry demand, supported by its B2B model, presence in key South Indian markets, and expertise in hallmarked 22-karat gold jewelry. They recommended the IPO as a long-term opportunity. - SMIFS: Subscribe
SMIFS pointed to Deepa Jewellers' superior capital efficiency and profitability, reflected in the highest ROE and ROCE among its peers in FY26. They recommended subscribing with a long-term investment horizon, citing strong market positioning and favorable industry tailwinds. - BP Equities: Subscribe
BP Equities noted the company's valuation at 13.9 times its diluted FY26 EPS, significantly lower than the peer average of 24 times. This, coupled with strong earnings growth, provides room for valuation re-rating, leading to a 'subscribe' rating. - Ventura Securities: Subscribe
Ventura highlighted the company's strong growth in revenue and PAT, robust ROE and ROCE, and improving leverage. Key positives include its established South India presence and specialized jewelry portfolio. However, they acknowledged risks such as high customer and geographic concentration, outsourced manufacturing, and significant working capital needs.
Emkay Global Financial Services and Valmiki Leela Capital are the book-running lead managers for the Deepa Jewellers IPO, with Bigshare Services acting as the registrar. The shares are scheduled to be listed on both the BSE and NSE on Thursday, September 8.