Shankesh Jewellers IPO announced: ₹196 crore issue, what you need to know
Shankesh Jewellers files DRHP for ₹196 Cr fresh issue. Revenue reached ₹1,630.79 Cr in FY26 with PAT at ₹106.68 Cr. Proceeds to repay ₹158 Cr debt. Key risks include customer concentration and jobworker dependency.
*this image is generated using AI for illustrative purposes only.
Shankesh Jewellers Limited, a Mumbai-based manufacturer of hand-crafted gold jewellery, has filed its Draft Red Herring Prospectus (DRHP) with the Securities and Exchange Board of India (SEBI). The company plans a ₹196.00 Crore fresh issue to repay outstanding borrowings and fund working capital requirements. This move marks a significant step for the Zaveri Bazar-based firm, which has seen its Profit After Tax (PAT) grow from ₹12.82 Cr in FY2024 to ₹106.68 Cr in FY2026.
Company Overview
Shankesh Jewellers Limited operates in the Indian gold jewellery industry, specialising in 22-karat and 18-karat BIS Hallmark certified hand-crafted gold jewellery. The company employs an asset-light business model, acting as a principal contractor that manages design, material sourcing, and finished jewellery delivery while leveraging a network of skilled Karigars (artisan jobworkers) for manufacturing.
Key operational highlights include:
- Product Range: Bangles, Bridal Jewellery, Chokers, Jhumkas, Necklace Sets, Mangal Sutra, and Rings.
- Manufacturing: Collaborated with 72 Jobworkers in Fiscal 2026, majority based in Mumbai.
- Clients: Supplies to marquee corporate clients including Joyalukkas India Limited and Kalyan Jewellers India Limited.
- Promoter Holding: Promoters collectively hold 74.25% of pre-issue equity share capital.
Offer Details
The company is raising funds through a fresh issue only, with no Offer for Sale (OFS) component. The total issue size is ₹196.00 Crore. The proceeds will be utilised as follows:
- Debt Repayment: ₹158.00 Crore for repayment/pre-payment of outstanding borrowings.
- Working Capital: ₹38.00 Crore to fund incremental working capital requirements.
- General Corporate Purposes: Balance amount as approved by the Board.
IPO Timeline:
- IPO Opening Date: 18-Aug-2026
- IPO Closing Date: 20-Aug-2026
- Allotment Date: 21-Aug-2026
- Listing Date: 25-Aug-2026
Note: Price band, lot size, and reservation details are not yet disclosed as this is the DRHP stage.
Financial Highlights
Shankesh Jewellers has demonstrated strong revenue growth and significant margin expansion over the last three fiscal years. Revenue from operations grew by ~53.60% from FY2024 to FY2026.
| Metric | FY2024 (₹ Cr) | FY2025 (₹ Cr) | FY2026 (₹ Cr) |
|---|---|---|---|
| Revenue from Operations | 1,061.78 | 1,403.83 | 1,630.79 |
| Total Expenses | 1,044.67 | 1,349.90 | 1,487.54 |
| Profit Before Tax (PBT) | 17.23 | 54.03 | 143.39 |
| Profit After Tax (PAT) | 12.82 | 40.31 | 106.68 |
| PBT Margin (%) | 1.62% | 3.85% | 8.79% |
| PAT Margin (%) | 1.21% | 2.87% | 6.54% |
Total equity increased from ₹60.29 Cr in FY2024 to ₹209.43 Cr in FY2026, reflecting strong retained earnings accumulation.
Risk Factors
Investors should consider the following material risks disclosed in the DRHP:
- Negative Cash Flow History: The company experienced negative net cash flow from operating activities of ₹231.05 million in Fiscal 2025 due to increased working capital deployment. Although FY2026 showed recovery to positive ₹0.33 Cr, volatility remains a concern.
- Significant Indebtedness: Total outstanding borrowings stood at ₹1,672.96 million as of 31-Mar-2026, with a debt-to-equity ratio of 0.81. Restrictive covenants limit operational flexibility.
- Dependence on Jobworkers: The company relies entirely on third-party Jobworkers (Karigars) for manufacturing. Any disruption or shortage of skilled artisans could impact operations.
- High Customer Concentration: Top 10 customers contributed 39.56% of revenue in FY2026, up from 30.62% in FY2024. There are no long-term contracts or exclusivity arrangements.
- Product Returns: Product returns increased to 7.22% of revenue in FY2026 (₹1,177.56 million), primarily due to customer preference adjustments.
Valuation & Peer Comparison
As the price band is not yet disclosed, valuation multiples such as P/E and P/B cannot be calculated. However, the company’s PAT margin expansion to 6.54% in FY2026 is noteworthy for the gold jewellery sector. Investors will need to compare post-issue valuations with listed peers like Titan Company Limited and Kalyan Jewellers India Limited once the RHP is filed.
Bottom Line
Shankesh Jewellers presents a case of rapid earnings growth and margin improvement, supported by an asset-light model and strong promoter backing. The primary use of proceeds—debt reduction—aims to strengthen the balance sheet. However, investors must monitor customer concentration risks, product return rates, and cash flow stability before making investment decisions.
How might the repayment of ₹158 Crore in debt impact Shankesh Jewellers' future borrowing capacity and interest expense coverage ratios?
Given the reliance on 72 jobworkers, what contingency strategies is the company implementing to mitigate supply chain disruptions or artisan shortages?
Will the high customer concentration (39.56% from top 10 clients) persist post-IPO, and does the company plan to diversify its client base to reduce dependency on major retailers like Joyalukkas and Kalyan?
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