BlueStone Jewellery IPO review

•    The company is engaged in offering contemporary lifestyle jewellery under its flagship brand “BlueStone”.
•    While it posted growth in its top lines, it continued to mark losses for the reported periods.
•    Management attributes losses for adjustments on ESOP, finance cost and other provisions.
•    Considering losses, the issue appears priced at a negative P/E.
•    There is no harm in skipping this pricey and dicey, negatively priced issue.

ABOUT COMPANY:
BlueStone Jewellery & Lifestyle Ltd. (BJLL) offers contemporary lifestyle diamond, gold, platinum and studded jewellery under its flagship brand, BlueStone. It is a digital first direct-to-consumer (“DTC”) brand focused on ensuring a seamless omnichannel experience for customers and are the second largest digital-first omni-channel jewellery brand in India, in terms of revenues in Fiscal 2024. BJLL retails its products through website www.bluestone.com and mobile application available on iOS and Google Play Store, in addition to pan-India network of stores. It is among the few Leading Jewellery Retailers with a pan-India presence with 275 stores across 117 cities in 26 States and Union Territories in India, as of March 31, 2025 servicing over 12,600 PIN codes across India.

The “BlueStone” brand was launched in 2011 and has over the years grown to become a leading brand among Leading Jewellery Retailers. As a design-led brand, it offers a variety of designs across various price points tailored to various occasions and customer preferences. The company focuses on designing jewellery for women, men and couples between the ages of 25 to 45 years who value unique designs, modern styles and have a tendency to discover brands through social media or online channels.

Its wide range of product offerings includes rings, earrings, necklaces, pendants, solitaires, bangles, bracelets and chains cater to diverse customer segments and are retailed at varied price points. As of March 31, 2025, BJLL had 91 collections (defined as a set of jewellery designs created with a specific theme) of jewellery products. As on the date of this Red Herring Prospectus, it operates three manufacturing facilities located in Mumbai, Maharashtra, Jaipur, Rajasthan and at Surat, Gujarat. It has been growing manufacturing capacity over the years to cater to increase in volumes and demand for its products and currently an additional manufacturing facility in Jaipur, Rajasthan is under-construction. Capacity utilization for Mumbai, Maharashtra facility was 98.57%, 78.19% and 83.91% in Fiscal 2025, 2024 and 2023, respectively. Further, capacity utilization for Jaipur, Rajasthan facility was 81.72%, 80.34% and 31.75% in Fiscal 2025, 2024 and 2023, respectively (Its manufacturing facility located at Jaipur, Rajasthan became operational during Fiscal 2023). Capacity utilization for Surat, Gujarat facility that commenced operations in May 2024 was 68.25% in Fiscal 2025. As of March 31, 2025, it had 1943 employees on its payroll. In addition, and had 1264 contract labourers as on the same date.

ISSUE DETAILS/CAPITAL HISTORY:
The company is coming out with its maiden book building route combo IPO worth Rs. 1540.65 cr. for 29799798 equity shares at the upper cap. The issue consists fresh issue worth Rs. 820.00 cr. (approx. 15860735 equity shares at the upper cap), and an Offer for sale for 13939063 equity shares (worth Rs. 720.65 cr. at the upper cap). The company has announced a price band of Rs. 492 – Rs. 517 per equity shares of Re. 1 each. The issue opens for subscription on August 11, 2025, and will close on August 13, 2025. The minimum application to be made is for 29 shares and in multiples thereon, thereafter. Post allotment, shares will be listed on BSE and NSE. The issue constitutes 19.69% of the post-IPO paid up equity capital. From the net proceeds of the fresh issue, the company will utilize Rs. 750.00 cr. for working capital, and the rest for general corporate purposes.

The joint Book Running Lead Managers (BRLMs) to this issue are. Axis Capital Ltd., IIFL Capital Services Ltd., and Kotak Mahindra Capital Co. Ltd., while KFin Technologies Ltd. is the registrar to the issue. Kotak Securities Ltd. is a syndicate member.

The company has issued initial equity shares at par value. It has also issued/converted further shares in the price range of Rs. 8.75 – Rs. 959.91 per share (based on Re. 1 FV) between October 2011, and July 2025. It has also issued bonus shares in the ratio of 9 for 1 in August 2022. The average cost of acquisition of shares by the promoters/selling stakeholders is Rs. 47.92, Rs. 48.70, Rs. 59.28, Rs. 63.68, Rs. 82.41, Rs. 92.81, and Rs. 262.76 per share. During Jully and August 2022, it also opted for a gimmick of consolidation and split of its equity shares from Re. 1 to Rs. 10 and vise-versa.

Post-IPO, its current paid-up equity capital of Rs. 13.55 cr. will stand enhanced to Rs. 15.13 cr. Based on the upper cap of the IPO price band, the company is looking for a market cap of Rs. 7823.26 cr. 

FINANCIAL PERFORMANCE:
On the financial performance front, for the last three fiscals, the company has (on a standalone basis) posted a total income/net profit/ -(loss), of Rs. 787.89 cr. / Rs. – (167.10) cr. (FY23), Rs. 1303.49 cr. / Rs. – (141.26) cr. (FY24), and Rs. 1830.04 cr. / Rs. – (222.65) cr. (FY25). According to the management, losses for all these fiscals is attributed to adjustments for ESOPs, Income Tax and depreciation provisioning and other accounting standards. Such trends may continue for coming few years. 

For the last three fiscals, the company has posted an average negative EPS of Rs. – (81.35) and an average RoNW of NA. The issue is priced at a P/BV of 7.72 based on its NAV of Rs. 66.94 as of March 31, 2025, and at a P/BV of 4.53 based on its post-IPO NAV of Rs. 114.11 per share (at the upper cap).

If we attribute FY25 NEGATIVE earnings to its post-IPO fully diluted paid-up equity capital, then the asking price is at a NEGATIVE P/E. Based on FY24 earnings, the P/E stands NEGATIVE. The issue appears negatively priced.

The company has posted NEGATIVE PAT margins of - (21.70) % (FY23), - (11.24) % (FY24), - (12.53) % (FY25), its NEGATIV E RoCE margins of - (31.16) %, - (3.39) %, - (3.67) %, respectively for the referred periods.

DIVIDEND POLICY:
The company has not declared any dividends for the reported periods of the offer document. It has already adopted a dividend policy in December 2024, based on its financial performance and future prospects.

COMPARISON WITH LISTED PEERS:
As per the offer document, the company has shown Titan Co., Kalyan Jewellers, Senco Gold, Thangamayil Jewellery, PC Jeweller, as their listed peers. They are trading at a P/E of 82.7, 68.1, 32.9, 56.9, and 15.6 (as of August 08, 2025). However, they are not truly comparable on an apple-to-apple basis. 

MERCHANT BANKER’S TRACK RECORD:
The three BRLMs associated with this offer have handled 86 issues in the last three fiscals, out of which 20 issues closed below the issue price on listing date.