M K Sons Fine Jewels

M K Sons Fine Jewels

By Geetanjali Kedia
about 1 day ago

IPO Size: Rs. 275 cr

  • Fresh Issue of Rs. 220 cr (24% dilution) for (i) expansion of 2 stores for Rs. 153 cr (ii) repaying Rs. 30 cr of Rs. 71 cr gross debt, as of 7.10.26
  • Offer for Sale (OFS) of Rs. 55 cr by promoter (100% to shrink to 70% post IPO)

Price band: Rs. 153-162 per share

M cap: Rs. 911 cr (IPO is 30% of m cap)

IPO Date: Wed 28th Oct to Fri 30th Oct 2026, Listing Wed 4th Nov 2026

Grey Market Premium (GMP): We are strongly against ‘grey market premium’ as it is an unofficial figure, against SEBI guidelines.

 

Mumbai-based Retail Jeweller

M K Sons Fine Jewels is a 27-year old jewellery business having 5 stores in Mumbai (3) and Ahmedabad (2), aggregating 6,500 sq ft. of retail space. Company is opening a new store at Ulhasnagar (Thane) and also expanding its Ahmedabad store, for which Rs. 153 cr will be deployed towards inventory, from the IPO proceeds.  

 

Highly Concentrated Business

57% of company’s Rs. 540 cr annual revenue comes from a single store in Ahmedabad, its oldest, admeasuring 3,950 sq. ft. Besides being a huge risk, it also implies company is a local jewel and not much of a large chain.

It is expanding this biggest store by 2,080 sq. ft area, implying greater dependance, going forward.

 

Margins Surge before the IPO

EBITDA margin which stood at 6% for FY24, jumped to 11% in FY25, and more than doubled to 15% in FY26. As a result, PAT margin also expanded from 3.8% in FY24 to 9.6% in FY26, and further to 14.9% in Q1FY27. Company attributes the strengthening margin to improving mix of higher-margin diamond and coloured stone (Cubic Zirconia, an unreal diamond, different from lab grown diamond) sales. But, between FY24 to FY26, revenue from coloured stone and diamond increased by Rs. 44 cr, whereas EBITDA jumped by Rs. 69 cr! Clearly surging gold prices helped boost financial performance of recent years, as seen for many other recent jewellery IPOs.

As volume sold is not disclosed, one is unable to have comfort on the financials of M K Sons.

 

Working Capital Heavy Business

On Rs. 539 cr revenue for FY26, company’s closing inventory stood at Rs. 256 cr, implying nearly 6 months of revenue blocked in inventory or 2x inventory turn, which is lower than larger relators’ 2.2-2.5x.

Need for inventory is large and hence company is undertaking a heavy dilution of 24% to fund inventory at new stores. Current net worth is Rs. 180 cr, with RoE of 37% in FY26. Post IPO, RoE may decline to teens though.