BlueStone Jewellery to Launch IPO on August 11; Fresh Issue Consists of Rs 820 Crore

About the Issue:

BlueStone Jewellery’s Initial Public Offering (IPO) is a book-built issue amounting to Rs 1,540.65 crore. The IPO comprises a fresh issue of 1.59 crore equity shares aggregating to Rs 820 crore, along with an Offer for Sale (OFS) of 1.39 crore shares worth Rs 720.65 crore by existing shareholders. The issue opens for subscription on August 11, 2025, and will close on August 13, 2025. The basis of allotment is expected to be finalized on August 14, 2025, with tentative listing on both the BSE and NSE scheduled for August 19, 2025.

The price band for the IPO is set in the range of Rs 492 to Rs 517 per share. The minimum bid lot for retail investors is 29 shares, requiring a minimum investment of Rs 14,268 at the upper end of the price band. For non-institutional investors (NIIs), the small NII (sNII) category requires a minimum application of 14 lots (406 shares), amounting to Rs 2,09,902, while the big NII (bNII) category requires 67 lots (1,943 shares), translating to an investment of Rs 10,04,531. Axis Capital Limited is acting as the Book Running Lead Manager (BRLM) to the issue, and Kfin Technologies Limited is the registrar.

See Details Below:

Utilisation of IPO Proceeds and Promoter Holding:

BlueStone Jewellery proposes to utilise the net proceeds from its upcoming IPO primarily for funding its working capital requirements, with an estimated allocation of Rs 750 crore. A portion of the proceeds will also be used for general corporate purposes. The company is promoted by Gaurav Singh Kushwaha, who holds an 18.28 per cent stake in BlueStone before the issue, which is expected to dilute to 16.07 per cent post-issue.

Company Profile

Incorporated in Karnataka on July 22, 2011, as “New Age E-Commerce Services Pvt. Ltd,” BlueStone Jewellery has undergone multiple transformations, most recently being renamed “BlueStone Jewellery and Lifestyle Limited” in November 2024 following its conversion into a public limited company.

The company has established itself as a prominent omni-channel jewellery brand in India, offering contemporary lifestyle jewellery crafted in diamond, gold, platinum, and other precious stones under its flagship brand, BlueStone. Launched in 2011, the brand caters to diverse consumer preferences with an extensive product range that includes rings, earrings, necklaces, pendants, solitaires, bangles, bracelets, and chains. These products are available across varied price points and are designed to appeal to men, women, and couples in the 25-45 age group, particularly those who value modern design and discover brands through digital platforms.

As of March 31, 2025, the company operates a robust retail footprint of 275 stores across 117 cities in 26 states and union territories, including franchise outlets. In addition to its physical stores, BlueStone reaches customers through its website and mobile applications on iOS and Android, reinforcing its omnichannel strategy. The company places strong emphasis on design innovation, offering 91 themed jewellery collections as of FY25.

With three operational manufacturing facilities in Mumbai (Maharashtra), Jaipur (Rajasthan), and Surat (Gujarat), and an additional facility under construction in Jaipur, BlueStone is enhancing its production capacity to meet rising consumer demand and scale its footprint further.

Industry Outlook:

India’s jewellery market has exhibited robust growth, expanding at a CAGR of 13 to 15 per cent between 2021 and 2024 to reach approximately Rs 6.34 lakh crore (USD 75 billion). This momentum is expected to continue, with the market projected to grow to Rs 11–12 lakh crore (USD 130–140 billion) by 2029 at a CAGR of 12 to 14 per cent.

By 2024, India is poised to surpass the United States to become the world’s second-largest jewellery market. Key drivers include rising disposable incomes, a growing middle class, increased financial independence among women, and heightened aspirational spending.

Government support through 100 per cent FDI, BIS hallmarking, jewellery parks, and ECLGS-backed credit guarantees have boosted the sector. Demand is shifting toward daily-wear, lightweight, and studded jewellery, with the latter’s share rising from 13 per cent in 2016 to 19 per cent in 2024.

The organised jewellery segment is expected to grow at a CAGR of 16 to 18 per cent, accounting for 43 to 47 per cent of the total market by 2029. Online and digitally influenced jewellery sales, which grew 70 per cent between 2021 and 2024, are projected to reach Rs 1.3–1.4 lakh crore by 2029, growing at 24 to 26 per cent CAGR.

Financials:

(Source – Company’s RHP)

Balance Sheet Snapshot

(Source – Company’s RHP)

Key Metrics

(Source – Company’s RHP)

Key ratios

(Source – Company’s RHP)

Listed Peer Comparison 

(Source- Screener.in and Company’s RHP)

(Note – Figures of FY25 considered, Price value of August 8, 2025 taken.)

BlueStone's revenue grew at a strong CAGR of 31.92 per cent from Rs 771 crore in FY23 to Rs 1,770 crore in FY25. However, growth slowed in FY25 to 39.83 per cent from 64.20 per cent in FY24. While trade receivables increased sharply, they remain a small fraction of sales (0.32 per cent in FY25), indicating manageable credit risk. However, cash flow from operations dropped sharply from Rs 27 crore in FY23 to negative Rs 666 crore in FY25, largely due to rising working capital needs. Inventory surged from Rs 395 crore to Rs 1,653 crore, now forming 93.39 per cent of sales. This suggests slower turnover and potential overstocking concerns

Strengths:

• Digital-first, omni-channel model with strong brand presence.
• 275 physical stores and strong online presence.
• High repeat customer rate (44.61 per cent in FY25).
• Industry-leading gross margin of 37.94 per cent.
• Over 7,400 unique designs across 91 collections.
• 75 per cent of stores breakeven within three months.
• Mature stores average Rs 76.8 lakh monthly revenue in FY25.

Weaknesses:

• Loss-making company with Rs 222 crore net loss in FY25.
• Operating cash flows deeply negative (Rs 665.83 crore in FY25).
• Inventory turnover slowing, suggesting inefficiencies.
• Highly capital-intensive business with high debt.
• Vulnerable to raw material price volatility and seasonal demand.
• Risks of under-utilised capacity and competition from lab-grown diamonds.

Outlook and Valuation

BlueStone’s IPO comes at a time when the Indian gems and jewellery sector is under pressure. The recent 50% US tariff on Indian jewellery exports, though not directly affecting BlueStone, has disrupted the broader industry, as the US is India’s largest export market. Exporters are exploring re-routing or relocating manufacturing to mitigate this impact. Additionally, geopolitical tensions have spiked gold prices, hurting demand, while diamond prices have dropped up to 55%, further dampening sentiment.

Despite this, BlueStone is seeking a premium valuation. At Rs 517 (upper band), the company is loss-making and cannot be valued on a P/E basis. Its Post issue EV/EBITDA of 124x and Market Cap to Sales of 6.18x far exceed peers like Titan (48.4x and 4.82x), Kalyan Jewellers (32.1x and 2.03x), and Thangamayil (30.3x and 1.16x). While the P/B of 3.12x looks modest, it’s weighed down by negative ROCE (-0.46 per cent) and ROE (-12.85 per cent), compared to Titan’s 31.8 per cent ROE and 19.1 per cent ROCE.

Operationally, cash flows are a red flag. CFO plunged from Rs 27 crore in FY23 to – Rs 666 crore in FY25, with CFO/revenue falling to -37.63 per cent. Inventory surged from Rs 395 crore to Rs 1,653 crore (93.39 per cent of sales), indicating slower turnover and inefficient working capital management. High leverage (D/E: 3.99x) also raises financial risk.

Recommendation

While BlueStone enjoys brand equity and growth visibility, its steep valuation, operational stress, and sector-wide challenges make it less attractive than listed peers. Given negative earnings, poor return ratios, and premium pricing amid industry headwinds, we recommend Avoiding this IPO.