JewelleryRetail

Lalithaa Jewellery: ₹1,700 Crore IPO for Expansion!

The Chennai-based gold and diamond jewellery retailer plans to raise ₹1,200 crore via fresh Issue and ₹500 crore through an Offer-for-Sale by promoter Kiran Kumar Jain.

Summary:
Lalithaa Jewellery Mart, one of South India’s most prominent jewellery retail chains, has filed draft papers with SEBI for a ₹1,700 crore Initial Public Offering (IPO). The IPO comprises a fresh issue of shares worth ₹1,200 crore and an Offer-for-Sale (OFS) of ₹500 crore by promoter Kiran Kumar Jain. The company aims to utilize the proceeds to expand its retail footprint, repay existing borrowings, and enhance working capital. The IPO signals a growing trend of regional jewellery brands tapping into public markets to fund national expansion and diversify their customer base.

Lalithaa Jewellery Mart Eyes IPO to Drive Next Phase of Growth
In a move that underscores its ambitions for rapid growth and deeper market penetration, Chennai-headquartered Lalithaa Jewellery Mart Ltd has filed its Draft Red Herring Prospectus (DRHP) with the Securities and Exchange Board of India for a ₹1,700 crore initial public offering (IPO). The proposed IPO will include a fresh issue of shares amounting to ₹1,200 crores while existing promoter Kiran Kumar Jain will sell shares worth ₹500 crore via the Offer-for-Sale (OFS) route.
The IPO is being managed by a consortium of leading investment banks and merchant bankers, including ICICI Securities, Axis Capital, and SBI Capital Markets, with a listing planned on both the BSE and NSE.

Company Profile: From Regional Powerhouse to National Aspirations
Established in 1985 by Kiran Kumar Jain, Lalithaa Jewellery Mart has grown into one of South India’s most trusted jewellery brands, known for its competitive pricing, purity assurance, and a broad range of gold, diamond, and platinum jewellery. With over 20 large-format showrooms spread across Tamil Nadu, Andhra Pradesh, Telangana, Karnataka, and Pondicherry, the brand enjoys a loyal customer base and strong brand recall, especially in Tier-II and Tier-III cities.
The company’s value-based business model—offering low-making charges, transparent pricing, and BIS-certified gold—has helped it win the trust of millions of middle-class families, who form its core clientele.
Now, with this IPO, the company aims to transition from a dominant regional player to a pan-India brand, leveraging the funds raised to expand operations and invest in new-age retail technologies.

Breakdown of the IPO Components
Fresh Issue – ₹1,200 Crore:
The funds raised from the new Issue will mainly be allocated for:
Expansion of Retail Network: Establishment of new stores across Northern and Western India, particularly in underpenetrated markets where demand for organized jewellery retail is rising.
Working Capital Requirements: Additional liquidity is needed to manage high inventory cycles typical in the jewellery business and to finance gold procurement without excessive reliance on Debt.
Repayment of Debt: Reduction of outstanding borrowings to improve the debt-to-equity ratio and enhance credit ratings.
Branding & Marketing: Investment in digital marketing, influencer-led campaigns, and brand-building activities to strengthen customer outreach across India.
Offer-for-Sale – ₹500 Crore:
The OFS will see promoter Kiran Kumar Jain offloading a portion of his stake. Post-listing, the move will help diversify the shareholding structure and increase the company’s float, aligning with public market governance standards.

Financial Snapshot
As per the DRHP, the company reported robust financial performance in FY24:
Revenue from operations: ₹6,580 crore, up from ₹5,820 crore in FY23.
Net profit: ₹328 crore in FY24 compared to ₹290 crore in FY23.
EBITDA margins: Stable around 7.8%, reflecting efficient inventory management and cost control despite fluctuating gold prices.
ROCE (Return on Capital Employed): 17.5%, indicating efficient capital utilization.
Net Debt: ₹490 crore, expected to reduce significantly post-IPO.
These strong numbers position Lalithaa Jewellery Mart as one of the most profitable regional players in the Indian jewellery retail space.

Jewellery Sector Trends: Timing the Market Well
Lalithaa’s IPO comes at a time when India’s jewellery market—particularly the organized retail segment—is witnessing double-digit growth. Consumers are increasingly shifting from unorganized local jewellers to trusted branded outlets due to quality assurance, transparency, and wider choices.
A recent KPMG report indicates that the Indian gems and jewellery market is projected to expand at a compound annual growth rate (CAGR) of 10–12% over the next five years, potentially reaching ₹12 lakh crore by 2030. Organized players currently account for just 35% of the market, offering huge room for expansion.
Moreover, festive demand, rising disposable incomes, and urbanization are driving first-time purchases among younger consumers, while innovations like lightweight gold jewellery and EMI-based purchases are expanding the addressable market.
Lalithaa’s focus on low-cost, high-volume business positions it well to tap into this transformation.

IPO Outlook: Investor Appetite Likely to Be Strong
Given the recent success of IPOs by jewellery brands like Senco Gold, Kalyan Jewellers, and PC Jeweller in public markets, analysts expect robust investor interest in Lalithaa’s offering. The company’s brand strength, healthy financials, and clear expansion roadmap make it an attractive proposition for both institutional and retail investors.
Furthermore, the dual benefit of a value-driven model and high growth potential aligns with current market sentiment favouring consumer-facing businesses with strong fundamentals.

Conclusion
Lalithaa Jewellery Mart’s proposed ₹1,700 crore IPO marks a crucial milestone in its journey from a trusted regional jeweller to a potential national player. With ambitious expansion plans, a strong brand, and a loyal customer base, the company is well-poised to capture a larger share of India’s burgeoning jewellery market. If successful, the IPO could also pave the way for more regional jewellery brands to tap capital markets for future growth.

The image added is for representation purposes only