Shanti Gold - A Focused Player in Gold Jewellery

25 Jul 2025 , 01:59 PM

Shanti Gold International is a 22ct CZ casting gold jeweller. It designs and manufactures a wide variety of gold jewellery, including bangles, rings, necklaces, and complete sets, catering to both special occasions and daily wear. It employs ~80 designers and launches ~400 new designs every month. It has an integrated manufacturing facility in Andheri with an annual capacity of 2700 kg.

The company is doing an IPO to strengthen its balance sheet and fund capex. The IPO is a fresh issue of INR 3,600 million with the majority of proceeds earmarked for working capital requirements.

Offer Details of the IPO

Offer Size:

The IPO comprises a fresh issue of up to 18,096,000 Equity Shares of face value of INR 10.00 each aggregating up to INR 3600 million. There is no OFS in this IPO.

Price Band: INR 189 to INR 199 per Equity Share

BRLMs:

·        Choice Capital Advisors Private Limited

Promoters/Founders Selling Shares:

The company promoters are Pankajkumar H Jagawat, Manojkumar N Jain and Shashank. None of them is selling their stake.

Objectives of the IPO:

The proceeds from the IPO will be used to strengthen the balance sheet and meet its capital expenditure requirements. Specifically, the net proceeds will be used by the company for the following goals:

1. Capital Expenditures: For establishing the Proposed Jaipur Facility: INR 462.97 million
2. De-leveraging/Repayment of Debt: For Redemption/pre-payment of certain borrowings of INR 170.00 million
3. Working Capital: To meet the working capital requirement of INR 2000 million

Industry Overview – Indian Gems and Jewellery

The Gems and Jewellery sector is an important sector in India and constitutes a major chunk of India’s total merchandise exports. It contributes to 7% of India’s GDP and 15% of India’s merchandise exports. The sector is also an integral part of the country’s culture and tradition. Gold and diamond jewellery is popular for weddings, festivals and celebratory occasions. The industry serves customers with varied socio-economic strata – from affluent luxury buyers to price-sensitive customers and offers a varied product range such as gold jewellery, diamond and studded jewellery, along with other stones and metals.

Domestic consumption is the backbone of the industry, and India is one of the world’s largest consumers of gold and diamond jewellery. The industry is also a major employer due to India being the hub of diamond-cutting and polishing. More than 90% of the world’s polished diamonds are produced in India. The industry entails a combination of organised and unorganised players, with unorganised players dominating the market.

Key Segments

The Indian Gems and Jewellery industry can be broadly segmented into the following key categories:

Gold Jewellery

Gold jewellery is the largest segment within the industry, accounting for approximately 80% of the market share. Gold jewellery is a traditional and cultural staple in Indian society, with gold being considered a symbol of prosperity and wealth. The segment includes a wide range of products, from traditional gold ornaments to modern and contemporary designs.

Diamond Jewellery

Diamond jewellery is another significant segment within the industry, accounting for around 10% of the market share. Diamond jewellery is gaining popularity in India, particularly among the younger generation, with a growing demand for diamond-studded gold jewellery.

Other Precious Stones and Metals

This segment includes other precious stones and metals, such as silver, platinum, and coloured gemstones. This segment is smaller compared to gold and diamond jewellery but is gaining traction, particularly among the younger generation, with a growing demand for fashion and contemporary jewellery.

Industry Size and Growth Trends

Over the years, Indian gems and jewellery industry has grown quite well, thanks to a surge in not only the domestic but also the export demand. The market size of the industry stood at Rs. 6,482 billion in CY23 with a CAGR growth of 28.7% between CY20 and CY23. The industry is dominated by gold jewellery as it accounts for 80% of the market.

Segment-wise Growth Trends

The sector can be classified into organised and unorganised sectors. In CY23, the share of the organised sector in the retail jewellery market was 35% while the share of the unorganised sector was 65%. This is expected to shift dramatically with organised growing to 60% and unorganised shrinking to 40% by CY29.Key Drivers of Growth

The rise of the industry can be attributed to several factors:

• Rising Demand for Branded Jewellery: Demand for branded jewellery is growing as a result of the enhanced consumer awareness regarding quality and certification. This is likely to further propel growth in the organised segment.
• Government’s Policies and Regulations: Positive government policies like mandatory hallmarking of gold jewellery and the introduction of the Goods and Services Tax (GST) have encouraged transparency, pricing uniformity and quality, guiding consumers to transition from unorganised local shops to organised certified retailers.
• Digital Transformation: Digital presence of brands, omnichannel retailing practices, and personalised customer experiences are making organised players more attractive, and eventually competitive, in the marketplace.
• Disposable Incomes on the Rise: Growing disposable incomes, especially in tier-II and tier-III markets, are upping demand for luxury and semi-luxury goods such as jewellery.

Overall, the Indian gems and jewellery industry is expected to continue to see robust growth in the near future.

Company Background – Shanti Gold International

Shanti Gold International Limited is a prominent producer of superior quality 22kt (cubic zirconia) CZ casting gold jewellery. It has expertise in both jewellery design and manufacturing. Pankajkumar H Jagawat and Manojkumar N Jain are both founders of the company. They have a combined experience of over 20 years in the industry.

The firm was originally established in 2003 as a partnership. The partnership firm was reconstituted as an LLC and renamed as Shanti Gold International Limited in 2013.

Its directors, Pankajkumar H. Jagawat and Manojkumar N. Jain, are also connected to other companies, such as Utssav CZ Gold Jewels Limited and Uzuri Jewels Private Limited. These corporations have businesses in similar segments to Shanti Gold International Limited, but have signed a non-compete agreement.

Key segments:

• Gold jewellery: Shanti Gold designs and manufactures 22kt gold jewellery, such as bangles, rings, necklaces, as well as whole sets of jewellery.

Services

The services offered by the company include:

• Personalisation: The customers can customise the products and design their personal jewellery items with the help of the company.
• Quality Control: Jewellery from Shanti Gold International Limited has been appreciated for its design and quality.

Key Features

• Large Variety of Products: The company provides a large variety of gold jewellery products, such as bracelets, rings, chains, and even full-fledged jewellery sets.
• Personalisation: The company provides personalisation services to its users for their jewellery products.

Competitive Landscape

The company operates in a highly competitive industry with several established players. Some of the major competitors include:

• Tanishq: A well-established jewellery brand in India, known for its high-quality products and strong distribution network.
• Kalyan Jewellers: A leading jewellery retailer in India, with a strong presence in the southern region.
• Malabar Gold & Diamonds: A prominent jewellery retailer in India, with a strong presence in the southern region.
• Joyalukkas India Limited: A leading jewellery retailer in India, with a strong presence in the southern region.

Strengths

• Customer-centric designs: The company’s focus on high-quality products, innovative designs, and excellent customer service has helped it to differentiate itself from its competitors.
• Strong Distribution Network: The company has a strong distribution network, with a presence in several states across India.
• Experienced Promoters: The promoters of the company have rich experience of over 20 years in the Jewellery industry
• In-House Manufacturing: The company has a complete integrated in-house manufacturing facility that focuses on better control of the quality of the products to achieve the desired quality of products to meet the requirements of customers.
• Focus On Efficiency: There is a high degree of automation in production and processing processes using machines like casting machines, steamers, induction melter, air compressors, etc.

Weaknesses

Volatility in raw material costs: The business produces jewellery based on gold, precious metals and stones. The prices vary significantly and would negatively impact the company’s profitability if the inventory is not managed properly.

Limited Geographical Presence: The company has a strong base in South India, with a weak presence in other regions.

High Working Capital Requirements: The company needs significant working capital due to the high cost of its inventory. Cash flow was also negative over the past 2 years. Efficient working capital management is critical for the company’s overall financial health and for the company to keep scaling its operations.

Single product line: Dependence on 22ct CZ casting gold jewellery exposes the company to risks of changing consumer preferences.

Financial Profile

Strong FY25 Revenue Growth: Shanti Gold International witnessed a robust revenue growth over the past two years. Revenue growth in FY25 was especially strong at 55.5%. To a large extent, the revenue growth was driven by the higher price of gold jewellery. The ASP of studded gold jewellery increased from INR 5772 in FY24 to INR 7277 in FY25. In addition to higher ASP, core demand for the company’s products was also higher, as evidenced by higher utilisation of its Andheri manufacturing facility and a 16-17% higher production volume in FY25 (vs FY24).

Several key factors have contributed to the company’s higher sales volume. These include:

• Increased demand for core products: The company’s core products have seen an increase in demand, driven by growing customer needs and preferences.
• Successful expansion into new markets: The company’s strategic expansion into new markets has opened up new revenue streams and provided access to a larger customer base.
• Innovative product offerings: The company’s focus on innovation has led to the development of new products and services that have resonated with customers and driven revenue growth.

Profitability on the Rise: EBITDA margins have increased for the past two years. From 6.71% EBITDA margins in CY23, they have improved to 8.8% in CY25. Higher utilisation and lower cost inventory (due to an increase in gold prices) were among the key reasons for the increased profitability over the past two years.

Table 1: Peer Comparison – Valuation

Company Name	Revenue FY2025 (INR million)	EPS Diluted FY2025 (INR)	NAV per share (INR)	P/E FY2025	Return on Net Worth FY2025 (%)
Shanti Gold International Ltd	11064.1	10.34	28.22	19.25*	44.85
Utssav CZ Gold Ltd	6463.2	11.63	53.23	19.35	30.94
RBZ Jewellers Ltd	5301.5	9.7	61.26	14.42	17.15
Sky Gold Ltd	35480.2	9.44	46.61	34.53	28.59

Source: RHP; * – Upper end of price band

Table 2: Peer Comparison – Financials

	FY23	FY24	FY25
Revenue from Operations
Shanti Gold International Ltd	6,794.0	7,114.3	11,064.1
RBZ Jewellers Ltd	2,879.3	3,274.3	5,301.5
Sky Gold Ltd	11,538.0	17,454.8	35,480.2
Utssav CZ Gold Ltd	2,381.9	3,402.0	6,463.2
Revenue YoY
Shanti Gold International Ltd		4.71%	55.52%
RBZ Jewellers Ltd		13.72%	61.91%
Sky Gold Ltd		51.28%	103.27%
Utssav CZ Gold Ltd		42.83%	89.98%
EBITDA
Shanti Gold International Ltd	455.7	534.5	977.1
RBZ Jewellers Ltd	394.6	388.7	648.9
Sky Gold Ltd	372.7	809.9	2,293.3
Utssav CZ Gold Ltd	138.9	229.0	403.4
EBITDA YoY
Shanti Gold International Ltd		17.30%	82.80%
RBZ Jewellers Ltd		-1.51%	66.96%
Sky Gold Ltd		117.31%	183.16%
Utssav CZ Gold Ltd		64.93%	76.15%
EBITDA Margin (%)
Shanti Gold International Ltd	6.71%	7.51%	8.83%
RBZ Jewellers Ltd	13.71%	11.87%	12.00%
Sky Gold Ltd	3.15%	4.43%	6.46%
Utssav CZ Gold Ltd	5.83%	6.73%	6.24%
Net Profit after Tax
Shanti Gold International Ltd	198.2	268.7	558.4
RBZ Jewellers Ltd	223.3	215.7	388.0
Sky Gold Ltd	186.1	404.8	1,326.6
Utssav CZ Gold Ltd	71.5	128.5	250.6
PAT YoY
Shanti Gold International Ltd		35.57%	107.84%
RBZ Jewellers Ltd		-3.42%	79.88%
Sky Gold Ltd		117.53%	227.70%
Utssav CZ Gold Ltd		79.69%	95.05%
Net Profit Margin (%)
Shanti Gold International Ltd	2.92%	3.78%	5.05%
RBZ Jewellers Ltd	7.76%	6.59%	7.32%
Sky Gold Ltd	1.61%	2.32%	3.74%
Utssav CZ Gold Ltd	3.00%	3.78%	3.88%
Return on Capital Employed (%)
Shanti Gold International Ltd	19.36%	17.97%	25.70%
RBZ Jewellers Ltd	23.44%	16.05%	20.18%
Sky Gold Ltd	17.10%	18.55%	23.36%
Utssav CZ Gold Ltd	21.65%	24.77%	21.48%
Debt-Equity Ratio
Shanti Gold International Ltd	2.37	2.18	1.6
RBZ Jewellers Ltd	1.04	0.33	0.37
Sky Gold Ltd	1.49	1.27	0.92
Utssav CZ Gold Ltd	2.22	2.07	1.03
Days Working Capital (days)
Shanti Gold International Ltd	102	124	109
RBZ Jewellers Ltd	200	263	208
Sky Gold Ltd	48	87	103
Utssav CZ Gold Ltd	94	77	109

Source: RHP