Acquisition Alert! Jewellery Company Expands Into Studded Products

Sky Gold & Diamonds Ltd has completed the acquisition of 100 per cent equity in Purvi Gems & Jewellery (India) Private Limited for a cash consideration of Rs 9 crore, strengthening its push into lightweight, uncut, precia and studded jewellery.

The transaction was completed on October 7, 2026. Sky Gold said the consideration represented 1.5 times Purvi Gems’ book value as of March 31, 2026. It added that the transaction is not a related-party deal and that neither its promoter nor promoter group has any interest in the acquired company.

The acquisition gives Sky Gold immediate access to specialised lightweight, uncut and precia jewellery, while increasing its presence in the higher-margin studded jewellery category. Purvi Gems manufactures uncut and precia jewellery and related products, with demand across South India and export markets.

For Sky Gold, which has historically operated as a business-to-business jewellery manufacturer, the deal fits its stated strategy of shifting its product mix beyond traditional 22-karat gold jewellery towards lower-karat, lightweight and value-added designs. Management has been seeking to increase the contribution of studded products and the Advance Gold model, which uses customer-supplied gold and can reduce inventory funding requirements.

The company expects Purvi Gems to contribute monthly sales of around 100 kg and said the business could generate annual revenue of more than Rs 1,600 crore to Rs 1,800 crore over the next two to three years. At the midpoint, this would be equivalent to around 27 per cent of Sky Gold’s FY26 consolidated revenue from operations of Rs 6,294.89 crore, although the revenue projection remains a company expectation dependent on execution, customer retention and market demand.

Sky Gold said Purvi Gems’ existing management would continue to oversee operations, which could support business continuity and integration. The company also expects cross-selling opportunities through its wider customer network and sees scope to expand specialised jewellery exports, particularly to the Middle East.

The purchase extends a series of category-led acquisitions by Sky Gold. Sparkling Chains, acquired to enter the chains business, reported turnover of Rs 760 crore and profit after Tax of Rs 22.3 crore for the year ended March 31, 2026. Starmangalsutra, acquired for the mangalsutra category, reported turnover of Rs 622 crore and profit after tax of Rs 22.9 crore in the same year.

The company has also added Speed Bangle to access lightweight-bangle manufacturing technology and acquired Shri Rishab Gold, whose business is primarily job-work based. These acquisitions indicate that Sky Gold is building a broader manufacturing portfolio rather than relying solely on its legacy plain-gold jewellery offering.

Recent financial performance provides context for this expansion. In the June 2026 quarter, Sky Gold reported net sales of Rs 2,012.79 crore, up 77.93 per cent year-on-year, while profit after tax rose 140.66 per cent to Rs 104.90 crore. Its PAT margin improved to 5.21 per cent from 3.85 per cent a year earlier, reflecting a richer business mix, according to management commentary.

The challenge will be to scale the acquired business without adding pressure to working capital. Jewellery manufacturing remains capital-intensive because of gold inventory and receivables, although Sky Gold has said it aims to improve cash conversion through Advance Gold arrangements and tighter receivables discipline.

As of 3:07 pm on October 7, 2026, Sky Gold shares were trading at Rs 876.50, up 2.06 per cent from the previous close. The stock has gained 196.24 per cent over the past year, compared with a 4.54 per cent decline in the BSE 500, while the company’s market capitalisation stood at about Rs 13,300.60 crore.

Disclaimer: The article is for informational purposes only and not investment advice.