Deepa Jewellers Limited, a Hyderabad-based B2B designer and processor of hallmarked gold jewellery, has filed its Draft Red Herring Prospectus (DRHP) with SEBI. The company is raising ₹215.00 Crore through a fresh issue to fund long-term working capital requirements and general corporate purposes. This IPO marks the public debut of a key player in South India’s organized jewellery supply chain.

Company Overview

Deepa Jewellers operates as an organized B2B designer, processor, and supplier of hallmarked gold jewellery. Headquartered in Hyderabad, Telangana, the company serves 373 customers, including 47 jewellery retail chains and 326 standalone stores across Telangana, Karnataka, Andhra Pradesh, Tamil Nadu, and Kerala. The business model relies on in-house design and outsourced manufacturing supported by 41 karigars (artisan craftsmen). Its product portfolio includes 16 products with 110 SKUs, specializing in high-demand items like Vaddanam (traditional waist belt) and CNC machine cut bangles. The promoters bring 25 years of industry experience since 2001.

Offer Details

The company has structured the offering primarily as a fresh issue to address significant working capital needs. Key details from the DRHP include:

Objects of the Issue

• Working Capital: ₹215.00 Crore to fund long-term working capital requirements towards procurement, maintenance, and scaling up of inventory.
• General Corporate Purposes: Funds for strategic initiatives, growth opportunities, marketing, brand building, and corporate contingencies (amount not specified).

Financial Highlights

Deepa Jewellers has demonstrated strong top-line and bottom-line growth over the last three fiscal years. Revenue from operations surged by approximately 88% from FY2024 to FY2026, while PAT grew by roughly 330% in the same period. EBITDA margins improved significantly from 3.49% in FY2024 to 7.60% in FY2026.

Despite strong profitability, the company reported negative operating cash flows in FY2025 (₹-9.86 Crore) and FY2026 (₹-14.73 Crore), driven by growth-related increases in inventories and trade receivables.

Risk Factors

Investors should consider the following material risks disclosed in the DRHP:

• Customer Concentration: Top 10 customers accounted for 64.67% of revenue in FY2026. Loss of key accounts could materially impact performance.
• Product & Geographic Concentration: Vaddanam and CNC bangles contributed ~72.72% of FY2026 revenue. Additionally, 94.37% of revenue came from Southern India.
• Gold Price Volatility: Gold prices fluctuated between ₹94,590 and ₹1,54,039 per 10 grams in FY2026. The company lacks complete hedging facilities.
• Negative Operating Cash Flows: Sustained negative cash flows from operations may strain liquidity despite reported profits.
• Supplier & Karigar Dependency: Top 10 suppliers accounted for 91.81% of purchases in FY2026. The company relies on 41 karigars, with only 29 having formal agreements.

Valuation & Peer Comparison

Direct peer comparison is complex as Deepa Jewellers operates in the niche B2B processing segment, unlike listed B2C retailers such as Titan Company or Kalyan Jewellers. With no price band available, valuation multiples cannot be precisely calculated. However, the company’s improving PAT margin (5.44% in FY2026) and declining debt-to-equity ratio (0.50x in FY2026) suggest strengthening financial health.

Bottom Line

Deepa Jewellers presents a case of rapid growth in the organized B2B jewellery sector, backed by strong revenue and profit expansion. However, investors must weigh this against high concentration risks in customers, products, and geography, as well as negative operating cash flows. The ₹215.00 Crore fresh issue aims to alleviate working capital pressures, which will be critical for sustaining growth post-listing.