Lalithaa Jewellery Mart
Lalithaa Jewellery Mart
IPO Size: Rs. 1,700 cr
- Fresh Issue of Rs. 1,200 cr (11% dilution): Rs. 1,033 cr primarily towards inventory of 10 new stores
- Offer for Sale (OFS) of Rs. 500 cr by promoter (98% to drop to 83% post IPO)
Price band: Rs. 190-201 per share
M cap: Rs. 11,250 cr (IPO is 15% of m cap)
IPO Date: Mon 17th Aug to Wed 19th Aug 2026, Listing Mon 24th Aug 2026
Grey Market Premium (GMP): We are strongly against ‘grey market premium’ as it is an unofficial figure, against SEBI guidelines.
Tamil Nadu-based Jewellery Retailer
Lalithaa Jewellery Mart is a 41-year-old Chennai based jewellery chain with 61 stores in Tamil Nadu, Andhra Pradesh, Telangana, Karnataka and Puducherry, having total operational area of 6.5 lakh sq ft, as of 31.3.26. Company was bought over by current promoter about 25 years ago.
Lalithaa has two inhouse manufacturing facilities and garners 60% of Rs. 25,000 cr revenue from stores in tier 2 & 3 cities, with home state Tamil Nadu being nearly half the topline.
Healthy Inventory Turns
Inventory turnover ratio has declined from 3.2x in FY22 to 2.6x in FY26. However, it still remains healthy vis-à-vis other retailers of Tamil Nadu or similar size - Kalyan 2.5x, Thangamayil 2.9x, Senco 1.9x.
Gold Prices improve Financials
Lalithaa’s revenue rose at 35% CAGR in between FY24 to FY26 to Rs. 25,024 cr. During this period, gold prices have risen at nearly 43% CAGR. Thus, although quantity of gold sold is not disclosed, it is safe to assume that company’s gold sale volumes have actually declined in the past 2 years.
As company earns making charges based on gold prices, gross margin has expanded from 7.6% in FY24 to 10.0% in FY26. FY26 net margin stood at 4%, on PAT of Rs. 1,010 cr, and an EPS of Rs. 20.2. However, long-term margin sustainability is questionable, as historically, company’s net margin has been close to 2%.
On a net worth of Rs. 2,930 cr, company clocked 42% RoE in FY26.
Attractive for Retail Business
M Cap of Rs. 11,250 cr implies a PE multiple of 10x on historic basis, which is very low, even for growth being price-led. Even if 2% net margin is penciled in over the long term. One year forward PE multiple is close to 13x, which is seen attractive for company’s scale of operations and also South Indian gold jewelery peers such as Kalyan (Rs. 36,000 cr topline) and Thangamayil (Rs. 8,000 cr topline) ruling over 30x.
Not for Long Term
Company does not hedge for gold prices yet. Thus, it benefits from price rise and gets impacted for sudden decline on inventory loss. We have had previous cases (Thangamayil for instance) reporting high variance in quarterly profits due to this business policy, Thus, Lalithaa is not for an investor’s long-term portfolio holding.