Shringar House of Mangalsutra IPO Opens Today — Should You Subscribe Or Avoid? Read Anand Rathi's Report

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Anand Rathi Report

Shringar House of Mangalsutra Ltd.'s initial public offering will launch today and the offer closes for subscription on Sep. 12. A B2B player engaged in designing, manufacturing and marketing a varied range of Mangalsutra has fixed the price band in the range of Rs 155 and Rs 165 per share.

The 400.95 crore IPO comprises entirely of a fresh issue of 2.43 crore shares and to participate in the IPO, retail investors need to bid for at least a single lot size of 90 shares.

Choice Capital Advisors Pvt. Ltd is the book running lead managers for the issue and MUFG Intime India Pvt. Ltd. is the registrar to the offer.

Objects of the Issue:

Funding working Capital requirements and General purpose

Valuation:

Shringar House of Mangalsutra Ltd. is B2B player engaged in designing, manufacturing and marketing a varied range of Mangalsutra which contributed to around 6% of organized Mangalsutra market in India in CY23.

The company offers an extensive range of Mangalsutra featuring over 15 collections and more than 10,000 active SKUs, catering to a diverse demographics. The Company has a dedicated in-house design team with 22 designers along with 166 in-house karigars helping in end-to-end operation, from designing to manufacturing.

The company has successfully positioned itself in the Indian jewellery market by combining traditional cultural value with modern design elements, creating a niche presence in a segment that is both heritage-driven and evolving with contemporary trends.

On the valuation front, based on annualized FY25 earnings, the company is seeking a P/E of 26 times, and a post-issue market capitalization of approximately Rs 15,911 million, making the issue appears to be fairly priced.

The company’s operations are working-capital intensive, with upfront gold payments and 15–20 days client credit. As scale expands, working capital needs will rise, and IPO proceeds will be used to fund them.

We also believe that the company is likely to benefit from the rising shift from unorganized to organised sector as well as the huge addressable market size of Mangalsutra, along with its plans to establish a new supply chain network to expand into untapped domestic markets and enter new international markets, We assign a ‘Subscribe for Long term’ rating for the IPO backed by Shringar’s robust growth, expanding client base, strong financials, and strategic expansion, enabling long-term value creation.

Key Risk:

High dependence on Mangalsutra sales without long-term client contracts:

The Company derives a major share of revenue from Mangalsutra sales to corporate clients, retailers, and wholesalers, without long-term contracts; any loss or order cancellation from these clients could materially impact business performance and financial results.

Risk of under-utilisation of manufacturing capacity:

The Company operated at 69.0%, 70.0%, and 66.8% capacity utilisation in Fiscal 2025, 2024, and 2023, respectively. Sustained under-utilisation of existing or expanded capacities may adversely affect business operations, growth prospects, and financial performance.

High working capital requirements:

The Company’s growth is dependent on significant working capital, with ₹2,800 million from net proceeds earmarked for funding requirements in Fiscal 2026. Any inability to secure working capital on commercially viable terms could adversely impact business operations, financial condition, and performance.

Dependence on a single manufacturing facility:

The Company’s operations are concentrated in a single manufacturing facility in Mumbai, Maharashtra. Any slowdown, disruption, or adverse regional development could materially impact business continuity, financial condition, and cash flows.

Product concentration risk:

The Company derives 100% of its revenue from the sale of Mangalsutras. Any decline in demand, or inability to manufacture and supply this product, could materially affect business performance, cash flows, and financial condition.

Credit risk from rising trade receivables:

Trade receivables increased from Rs 469.93 million in FY23 to Rs 604.69 million in FY24 and further to Rs 877.74 million in FY25. Delays in collections or customer defaults could reduce profitability and adversely impact business operations, cash flows, and financial condition.

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