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Deepa Jewellers IPO Draws Strong Demand, Grey Market Signals Gains
Deepa Jewellers is selling shares to the public through an IPO.
Investors can bid between ₹168 and ₹177 per share, with each lot containing 84 shares.
The IPO opened on 1 September and closes on 3 September.
By the second day, investors had placed bids for more shares than were available.
The grey market was suggesting that the shares could list at about ₹205.
Several brokerages liked the company’s growth and its lower valuation compared with similar companies.
However, much of its business comes from a small group of customers, which creates a risk.
The company will use much of the money raised for jewellery inventory and working capital, while some funds will support a new manufacturing facility.
Deepa Jewellers’ IPO closes on 3 September with a price band of ₹168–₹177 and a lot size of 84 shares.
The grey market premium is reported at ₹28, implying an estimated listing price of ₹205, or a 15.82% gain at the upper price band.
The issue was subscribed 3.60 times by day two, including 4.69 times for retail investors and 5.10 times for non-institutional investors.
Brokerages cited strong earnings growth, return ratios and discounts to peers, while warning about customer concentration, regional preferences and working-capital needs.
The ₹250 crore fresh issue will primarily fund working capital and inventory, while the company also plans a 6,696 sq ft manufacturing facility in Hyderabad.
- Who
- Deepa Jewellers, a B2B designer and supplier of hallmarked gold jewellery in southern India.
- What
- The company is conducting an IPO comprising a ₹250 crore fresh issue and an offer for sale of up to 1.18 crore shares.
- Where
- The shares are expected to list on the BSE and NSE; the planned manufacturing facility will be in Hyderabad.
- When
- The IPO opened on Tuesday, 1 September, and closes on Thursday, 3 September; allotment is expected on 4 September and listing on 8 September.
- Why
- The company plans to use fresh-issue proceeds mainly for long-term working capital, jewellery inventory and general corporate purposes.
Reasons to consider the IPO
Risks and reasons for caution
Valuation and growth
Reasons to consider the IPO
Swastika Investmart, SBICAP Securities, Canara Bank Securities and BP Equities cited strong earnings growth and valuation discounts to listed peers; three brokerages assigned Subscribe ratings.
Risks and reasons for caution
The reported valuation comparisons vary by methodology, ranging from about 13.85x to 16.2x FY26 P/E, so the precise discount depends on the calculation used.
Business concentration
Reasons to consider the IPO
The company has reported rapid revenue, EBITDA and PAT growth between FY24 and FY26, along with strong reported ROE and ROCE figures.
Risks and reasons for caution
Swastika Investmart said the top 10 customers contributed 64.67% of FY26 revenue and had no long-term contracts, creating concentration risk.
Operating model and expansion
Reasons to consider the IPO
Canara Bank Securities said the planned Hyderabad facility and high-tech machinery could reduce dependence on craftsmen; SBICAP Securities also highlighted the company’s hedging framework for gold-price volatility.
Risks and reasons for caution
The company relies on a decentralised, machine-led outsourced manufacturing model, has only 41 karigars, and is exposed to shifts in regional preferences for Vaddanam and CNC bangles, as well as rising receivables and a 53-day operating cycle.
Key facts
- Price band
- ₹168–₹177 per equity share
- Lot size
- 84 equity shares
- Grey market premium
- ₹28, implying an estimated ₹205 listing price at the upper band
- Subscription
- 3.60 times on day two; retail 4.69 times, NII 5.10 times and QIB 46%
- Issue size
- ₹250 crore fresh issue, plus an offer for sale of up to 1.18 crore shares
- Expected allotment
- Basis of allotment expected to be finalised on Friday, 4 September
- Expected listing
- Shares are expected to list on the BSE and NSE on Tuesday, 8 September
Sources
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