Shringar House IPO review

•    The company is engaged in designing and manufacturing of variety of Mangalsutra for B2B segment.
•    The company posted growth in its top and bottom lines for the reported periods.
•    It has created a niche place in the Mangalsutra segment and enjoys first preference.
•    Based on its recent financial data, the issue appears aggressively priced.
•    Well-informed investors may park funds for long term.

ABOUT COMPANY:
Shringar House of Mangalsutra Ltd. (SHML) is amongst the leading and specialized designers and manufacturers of Mangalsutra in India. (Source: CareEdge Report). It is engaged in designing, manufacturing, and marketing, a varied range of Mangalsutra studded with diverse range of stones including but not limited to, American diamond, cubic zirconia, pearl, mother of pearl, and semi-precious stones, in 18k and 22k purity of gold, to its business-to-business (“B2B”) clients. Mangalsutra is a traditional necklace, crafted from gold and black beads worn by married Indian women which symbolizes marital status and is a sacred thread that is believed to bless and extend the life of the spouse. The Company contributed to around 6% of organized Mangalsutra market in India in CY23 (Source: CareEdge Report).

The Mangalsutra is more than a piece of jewellery in India; it embodies personal identity, cultural heritage, and marital commitment. Preferences for Mangalsutra designs vary significantly across different age groups, reflecting the evolving interests, lifestyles, and values of Indian women. Every demographic has different needs and perspectives, from senior women who value traditional motifs to young brides who choose modern patterns. (Source: CareEdge Report).

SHML sells its products to a diverse range of clients including Corporate Clients, wholesale jewellers, and retailers across the country, more particularly in twenty-four (24) states and four (4) union territories. In addition to serving domestic clients, it has also expanded reach to international clients in United Kingdom, New Zealand, UAE, USA and Republic of Fiji, during the Fiscals 2025, 2024 and 2023. Some of its marquee domestic and international Corporate Clients include Malabar Gold Limited, Titan Company Limited, GRT Jewellers India Private Limited, Reliance Retail Limited, Novel Jewels Limited (Aditya Birla Group), Joyalukkas India Limited, P N Gadgil Jewellers Limited, Kalamandir Jewellers Limited, Waman Hari Pethe Jewellers, Goldbox Enterprises Limited (UK), Sona Sansaar Limited (New Zealand), Damas Jewellery LLC (UAE), Lalithaa Jewellery Mart Limited, Manoj Vaibhav Gems “N” Jewellers Limited, D. P. Abhushan Limited, amongst others. During FY25, it served 34 Corporate Clients, 1,089 wholesalers and 81 retailers.

The company offers an extensive portfolio of Mangalsutras, featuring over 15 collections and more than 10,000 active SKUs, designed to suit special occasions such as weddings, festivals, and anniversaries, as well as daily-wear options including antique, bridal, traditional, contemporary, and Indo-western styles. These designs cater to women of all ages, with a variety of price points and weights. Its Mangalsutra designs draw inspiration from ancient Indian art and culture, merging these aspects with contemporary aesthetics to produce pieces that are yet timeless and modern. SHML jewellery collection features a diverse range of stones, including but not limited to American diamond, cubic zirconia, pearls, mother of pearl, and semi-precious stones, all intricately set in gold. As of June 30, 2025, it has a dedicated in-house design team of 22 full-time employees who focus on developing new products and designs that align with latest trends, customer lifestyles, aspirations, and demographic preferences across the country. In addition, it has a team of 166 In-house Karigars and it also collaborate with a network of third-party Karigars to meet the growing market demand for its products. As of June 30, 2025, it had 237 employees on its payroll.

ISSUE DETAILS/CAPITAL HISTORY:
The company is coming out with its maiden book building route IPO of 24300000 fresh equity shares worth Rs. 400.95 cr. (at the upper cap) The company has announced a price band of Rs. 155 – Rs. 165 per equity shares of Rs. 10 each. The issue opens for subscription on September 10, 2025, and will close on September 12, 2025. The minimum application to be made is for 90 shares and in multiples thereon, thereafter. Post allotment, shares will be listed on BSE and NSE. The issue constitutes 25.20% of the post-IPO paid-up equity capital. From the net proceeds of the fresh equity issue, the company will utilize Rs. 280.00 cr. for working capital, and the rest for general corporate purposes. 

The company has reserved 20000 shares (worth Rs. 0.33 cr.) for its eligible employees, and offering them a discount of Rs. 15 per share, and from the rest, it has allocated not more than 50% for QIBs, not less than 15% for HNIs and not less than 35% for Retail investors.

The sole Book Running Lead Managers (BRLM) to this issue is Choice Capital Advisors Pvt. Ltd., while MUFG Intime India Pvt. Ltd., is the registrar to the issue. Choice Equity Broking Pvt. Ltd. is a syndicate member.

Having issued initial equity shares at par, the company issued further equity shares in the price range of Rs. 10.47 – Rs. 192.00 per share (based on Rs. 10 FV), between August 2009 and November 2024. It has also issued bonus shares in the ratio of 7 for 1 in November 2024. The average cost of acquisition of shares by the promoters is Rs. 1.31, Rs. 1.32, Rs. 1.33, and Rs. 1.99 per share. 

Post-IPO, its current paid-up equity capital of Rs. 72.13 cr. will stand enhanced to Rs. 96.43 cr. Based on the upper cap of the IPO price band, the company is looking for a market cap of Rs. 1591.13 cr. 

FINANCIAL PERFORMANCE:
On the financial performance front, for the last three fiscals, the company has posted a total income/net profit of Rs. 951.29 cr. / Rs. 23.36 cr. (FY23), Rs. 1102.71 cr. / Rs. 31.11 cr. (FY24), and Rs. 1430.12 cr. / Rs. 61.11 cr. (FY25). It posted growth in its top and bottom lines for the reported periods. Boosted net profit for FY25 raise eyebrows and concern over its sustainability as it is operating in a highly competitive and fragmented segment.

For the last three fiscals, the company has posted an average EPS of Rs. 6.29 and an average RoNW of 30.79%. The issue is priced at a P/BV of 5.93 based on its NAV of Rs. 27.84 as of March 31, 2025, and at a P/BV of 2.64 based on its post-IPO NAV of Rs. 62.41 per share (at the upper cap). 

If we attribute FY25 super earnings to its post-IPO fully diluted paid-up equity capital, then the asking price is at a P/E of 26.03. Based on FY24 earnings, the P/E stands at 51.08. Thus, the issue is aggressively priced. 

The company reported PAT margins of 2.46% (FY23), 2.82% (FY24), 4.27% (FY25), and RoCE margins of 19.46%, 21.52%, 32.43% for the referred periods, respectively. 

DIVIDEND POLICY:
The company has not paid any dividends on equity shares 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 Utssav CZ, RBZ Jewellers, Sky Gold, as their listed peers. They are currently trading at a P/E of 17.8, 14.9, and 26.8 (as of September 05, 2025). However, they are not truly comparable on an apple-to-apple basis.

MERCHANT BANKER’S TRACK RECORD:
The sole BRLM associated with the offer has handled 7 pubic issues in the past three fiscals, all issues opened with premium ranging from 0.045% to 90.00% on the listing date.