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Anand Rathi Report
Here are the 10 things to know before investing
1. Advit Jewels Ltd.'s initial public offering (IPO) will be launched today, June 23 and the offer closes for subscription on June 25.
2. The Jaipur-based luxury jewellery manufacturer and retailer operating under the heritage Rambhajo's brand has fixed the band in the range of Rs 130 and Rs 138 per share.
3. The Advit Jewels IPO is a book build issue of Rs 165.16 crore. It comprises a fresh issue of 1.2 crore shares.
4. Holani Consultants Ltd. is the book-running lead manager while the Bigshare Services Ltd. is the registrar of the issue.
5. Investors can place bids starting from a minimum of 100 shares and in multiples thereafter.
6. Bluestone Jewellery and Lifestyle, RBZ Jewellers Ltd., Radhika Jeweltech Ltd. are the other listed peers in the sector.
7. Object of the issue
- Funding incremental working capital requirements of the company.
- Pre-payment, or scheduled repayment, in full or part, of certain borrowings availed by the Company.
- General Corporate Purpose.
8. About Advit Jewels
Advit Jewels has established a differentiated position within the Indian jewellery industry through its focus on premium handcrafted jewellery categories such as Polki, Kundan, Jadau and Meenakari jewellery, supported by the heritage Rambhajo's brand with roots dating back to 1921.
The company benefits from specialized design capabilities, skilled artisan networks and an integrated manufacturing setup located in Jaipur, one of India's most prominent jewellery manufacturing hubs. Its predominantly B2B-led business model provides access to a broad retailer and distributor network, while its branded retail presence enables direct engagement with bridal and luxury jewellery customers.
The company's emphasis on high-value, craftsmanship-driven jewellery categories allows it to derive value beyond gold content, supported by established customer relationships, customization capabilities and strong positioning within the traditional bridal jewellery segment.
9. Key Strengths
- Integrated Manufacturing Platform with In-House Capabilities.
- Strong Design Capabilities and Customization Expertise.
- Established Heritage Brand with Deep Industry Experience.
- Robust Operational Controls and Risk Management Framework
- Focus on Quality and Craftsmanship.
10. Key Risks
- Gold, diamond polki and precious/semi-precious stones constitute virtually the entire raw material cost of the company, accounting for over 99% of material consumption across the reported periods. The company does not operate under long-term procurement contracts and remains exposed to fluctuations in gold and gemstone prices, supply shortages and sourcing disruptions. Any significant increase in raw material prices or inability to secure adequate supplies could adversely impact margins, working capital requirements and profitability.
- The business is highly inventory-intensive, with inventory levels increasing significantly over the last three fiscals and accounting for a substantial proportion of both current assets and annual revenue. Inventory holding days increased from 91 days in FY23 to 199 days in FY25.
- The company relies on a limited number of suppliers for procurement of gold, diamond polki and gemstones, with the top 10 suppliers accounting for nearly 87%–94% of raw material purchases during the reported periods. Any disruption in supply, deterioration in supplier relationships, adverse pricing actions or inability to source materials from alternative vendors could adversely affect production schedules and operating performance.
- The company's entire manufacturing operations are located in Jaipur, Rajasthan, which is also the primary sourcing hub for a significant portion of its raw materials. Consequently, any regional disruption arising from regulatory actions, labour shortages, infrastructure constraints, natural calamities or other unforeseen events in Jaipur could adversely impact manufacturing operations, procurement activities and overall business continuity.
- A significant portion of revenue is derived from a relatively small customer base, with the top 10 customers contributing more than half of total revenue in recent periods.
- Despite reporting profitability, the company has generated negative operating cash flows in certain historical periods, primarily due to substantial investments in inventory and working capital. Sustained pressure on cash flows could increase dependence on external borrowings and impact the company's ability to fund operations efficiently.
- The company operates primarily in traditional jewellery categories such as Kundan, Polki and Jadau jewellery. Changes in consumer preferences towards alternative jewellery formats, lightweight designs, studded jewellery, lab-grown diamonds or other emerging categories could impact demand for the company's core product offerings and affect growth prospects.
- A substantial proportion of revenue is generated from a few key states, particularly Rajasthan, Maharashtra and Gujarat. Any adverse economic, regulatory or competitive developments in these markets could have a disproportionate impact on the company's revenue and operating performance.
- The company does not register all of its jewellery designs under the Designs Act, 2000. As a result, it may face the risk of design imitation by competitors, which could dilute product differentiation and brand value. Additionally, the company may be exposed to intellectual property disputes relating to jewellery designs.
- Under-utilization of their manufacturing capacity (21.58% as of December'2026) could adversely affect their future financial condition and operational performance.
- The jewellery industry remains dependent on the availability of imported gold. Any adverse changes in import duties, trade regulations, tariff structures, allocation mechanisms or government policies relating to gold imports could affect raw material availability, procurement costs and overall competitiveness.
- They have issued equity shares at a price that may be lower than the Issue Price in the last 12 months.
Valuations
At the upper price band, the IPO is valued at a P/E multiple of 25.1x based on FY25 earnings and 19.7x on annualized FY26 earnings, along with an EV/Ebitda multiple of 18.9x based on FY25 earnings, implying a post-issue market capitalization of Rs 632 crore.
While the issue appears aggressively priced, the company's strong growth prospects, scalable business model, and favorable industry outlook support its long-term potential. Accordingly, Anand Rathi has assigned a "Subscribe for Long Term" rating to the IPO.
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