Shankesh

IPO Size: Rs. 367 cr

• Fresh Issue of Rs. 274 cr (20% dilution) for (i) repaying Rs. 158 cr of Rs. 167 cr debt (ii) Rs. 38 cr working capital
• Offer for Sale (OFS) of Rs. 93 cr by promoter (95% to drop to 70% post IPO)

Price band: Rs. 88-93 per share

• Rs. 2.12 cr raised in Sep 2025 at Rs. 67 per share

M cap: Rs. 1,367cr (IPO is 27% of m cap)

IPO Date: Tue 18^th Aug to Thu 20^th Aug 2026, Listing Tue 25^th Aug 2026

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

 

Mumbai based B2B Jeweler

Shankesh Jewellers is a 34-year-old Zaveri Baazar based B2B jeweler engaged in making handmade jewellery from jobworkers, which are in-turn sold to jewellery retailers. 65% of Rs. 1,600 cr revenue comes from corporate clients such as Joyalukkas, PNGadgil, Kalyan, Bhima Madurai.

 

Gold Price surges Profits

Shankesh’s profits rose sharply in the past 2 years, prior to IPO, due to unprecedented surge in gold prices, even as quantity processed declined at 12% CAGR to 1,397 kg gold. Gold prices surged 2.5x from Rs.60,000 per 10 gm in Mar 2024 to Rs. 1.5 lakh per 10 gm in Mar 2026. This 58% CAGR was abnormally higher than 8-10% seen historically, which led to Shankesh’s net profit jumping 7x Rs. 13 cr in FY24 to Rs. 107 cr in FY26, despite lower volumes.  

 

Margins Unsustainable in Long Term

Company earns making charges as a percentage to gold price. This, supported by inventory gains, led to 24% CAGR in revenue between FY24-FY26 to Rs. 1,631 cr. But profit jumped at a much faster clip, at 190% CAGR to Rs. 107 cr. Thus, net margin expanded from mere 1.2% in FY24 to 6.6% in FY26, leading to an EPS of Rs. 9 for FY26.

Sustainability of profits and margins is linked to gold price movement. We do not expect 6.6% net margin to be maintained in the long term.

 

Fully Priced Micro-cap Jeweller

M cap of Rs. 1,367 cr implies a PE multiple of 10x on historic FY26 basis. This is fully valued for a small B2B jeweller, mainly earning from commodity price gains. Even other listed B2B peers like RBZ and Shanti Gold are trading at similar PE, for slightly higher margin than Shankesh.

Going by Q1FY27 earnings, short term outlook is decent but long term remains cautious.