Lalithaa Jewellery Mart, a South India-focused jewellery retailer, will open its ₹1,700-crore IPO from August 17 to 19. It comprises a fresh issue of ₹1,200 crore and an offer for sale of ₹500 crore. Of the fresh issue, ₹1,033 crore will fund 10 new stores.
The price band is ₹190-201. At the upper end, the company will have a market capitalisation of around ₹11,500 crore and is valued at 11.3 times FY26 earnings on post-issue shares. Promoter holding will be around 82.85 per cent after the offer.
Here’s our analysis on the company and our take on whether you should subscribe to this IPO.
Business, growth
The Indian gems and jewellery retail industry was estimated at ₹12.89 lakh crore in FY26 and may reach ₹15.1-15.5 lakh crore by FY30. Retail chains’ share increased from 30-35 per cent in FY20 to 37-42 per cent in FY26 and is expected to reach 45-50 per cent by FY30.
South India accounts for around 40 per cent of the market and this is the primary focus of Lalithaa Jewellery Mart. The company caters to the price-conscious mass market in southern India, offering gold, silver and diamond jewellery through competitive value-addition charges, large showrooms and a wide assortment.
It operates 61 company-operated stores across 51 cities in Tamil Nadu, Andhra Pradesh, Telangana, Karnataka and Puducherry, covering 6.51 lakh sq ft. Of these, 58 operate from leased premises. Notably, eight of the 10 proposed stores are in Tamil Nadu, which already contributes 54 per cent of revenue.
Gold jewellery contributed 92.33 per cent of FY26 revenue and silver jewellery and articles 6.63 per cent. Separately, studded gold generated only 1.04 per cent revenue, down from 2.16 per cent in FY24. Studded revenue declined 28 per cent during this period despite total revenue growing 48 per cent. Studded jewellery are the ones that is embedded with stones like diamond and thus carries relatively higher margin over plain gold jewellery.
FY26 revenue per store was around ₹410 crore and revenue per sq ft was ₹3.84 lakh, among the best in the organised jewellery space.
Jewellery schemes encourage repeat purchases and fund working capital, but comes at a cost through discounts in value-addition charges. In FY26, the company wrote down inventory by ₹273 crore because realisable value under scheme commitments was below its carrying value.
Financials
Revenue grew at a 22.1 per cent CAGR between FY24 and FY26 to ₹25,024 crore. Operating EBITDA increased from ₹680 crore to ₹1,674 crore and margin expanded from 4.05 per cent to 6.69 per cent. PAT rose from ₹360 crore to ₹1,010 crore, with margin improving from 2.14 per cent to 4.04 per cent.
But revenue was almost flat in FY25 before rising 48 per cent in FY26, aided substantially by surge in gold prices in FY26. Average gold realisation increased from ₹59.6 lakh per kg in FY24 to ₹1.06 crore in FY26, while gold sold declined 16.6 per cent to 21,691 kg. With stores increasing from 53 to 61, average volume per store fell about 28 per cent. Hence, given that price increase in gold played a significant role in revenue, FY26 margins and return ratios may not be sustainable, particularly in the event of a decline in price.
Inventory increased from ₹4,292 crore to ₹9,816 crore and inventory days rose from 93 to 143. The reported working-capital cycle was 65 days, better than most listed peers. While customer advances improve working capital cycle, as mentioned, such advances carry discount obligations.
Risks
Lalithaa does not hedge its gold price exposure through metal loans or derivatives. Deploying around ₹1,000 crore of IPO proceeds into inventory, therefore, may carry price, timing and markdown risks in case of price correction. Rising gold prices can also suppress demand and increase working capital requirements.
Operating cash flow was negative ₹398 crore in FY26 despite net profit of ₹1,010 crore implying weak cash conversion, as inventory purchases absorbed ₹3,944 crore. Customer schemes also come at a cost since those schemes carry discount in value-addition charges.
Borrowings increased 69 per cent to ₹1,604 crore in FY26. However, outstanding borrowings dropped nearly 23 per cent to ₹1,238 crore as of June 2026.
Other concerns include the absence of e-commerce revenue and a decline in studded jewellery’s revenue share from 2.16 per cent in FY24 to 1.04 per cent in FY26. Supplier concentration is also high as the largest supplier accounted for 50.44 per cent of FY26 purchases.
Should you subscribe?
The company has achieved considerable scale and high store productivity. The continuing shift from unorganised jewellers to retail chains also provides a structural growth opportunity.
However, unhedged gold inventory, weak cash conversion and an inventory-intensive expansion plan limit the margin of safety. Higher gold prices can suppress demand and increase working capital requirements, while unexpected volatility can expose inventory to markdown risk.
Lalithaa Jewellery Mart is valued at about 11.3 times reported FY26 earnings. This appears inexpensive, but FY26 profitability coincided with a sharp rise in gold prices and a substantial margin expansion. Also, considering the average profits through FY24 to FY26, the P/E ratio stands around 20. Hence, we would prefer a wait and watch approach for now and investors can wait for more clarity to assess sustainable and long-term profit margins.
Amongst listed peers, Senco Gold is trading cheaper at a trailing PE of 10 times, while PN Gadgil Jewellers is at 20 times and others like Kalyan Jewellers and Thanga Mayil Jewellery are at around 40 times, which is quite expensive. While Lalithaa, Senco and PN Gadgil had negative operating cash flow in FY26, Kalyan and Thanga Mayil had positive operating cash flow.
Published on August 15, 2026
