Shankesh Jewellers IPO (18-20 August) Analysis

IPO Analysis | BSE and NSE Main Board | 100% Book Built Offer (Fresh Issue and Offer for Sale) | Regulation 6(1)

Based on Red Herring Prospectus dated August 10, 2026 | Hand-Crafted Gold Jewellery Design and B2B Wholesale Supply | Mumbai, Maharashtra

STATUS: LIVE RHP, ANCHOR BID AUGUST 17, BIDDING OPENS AUGUST 18 AND CLOSES AUGUST 20, 2026

Fresh Issue: up to 2,94,82,000 Equity Shares | Offer for Sale: up to 1,00,00,000 Equity Shares by 2 Promoters | Main Board Listing on BSE and NSE

RoNW of 50.94% (FY26), More Than Double Both Listed Peers | PAT Grew More Than 8 Times Over 2 Years | Clients Include Kalyan Jewellers, P N Gadgil and Joyalukkas

 Shankesh Jewellers Limited was incorporated as H. K. Gold Private Limited on July 11, 2005, renamed Shankesh Jewellers Private Limited in 2006, and converted to a public limited company in April 2025. Its CIN is U36910MH2005PLC154679, with its registered office in Zaveri Bazar, Mumbai, Maharashtra. The Promoters are Kantilal Kheemraj Jain, Mahavir Kantilal Jain and Manoj Kantilal Jain.

Unlike most jewellery companies in this report series, Shankesh Jewellers is not primarily a consumer-facing retailer but a B2B hand-crafted gold jewellery designer and wholesale supplier, operating an asset-light model where the Company manages design, material sourcing and end-to-end delivery while outsourcing actual production to third-party Karigars (artisans) through Jobworkers.

Its clientele includes major corporate jewellery retail names such as Joyalukkas India Limited, Kalyan Jewellers India Limited, P N Gadgil Jewellers Limited, P. N. Gadgil & Sons Limited, Manoj Vaibhav Gems 'N' Jewellers Limited and Novel Jewels Limited (part of the Aditya Birla Group), alongside a number of non-corporate wholesale jewellers. The Company's product range spans antique, semi-antique, Calcutta, temple and Gheru polish jewellery categories in 22-karat and 18-karat gold.

Revenue grew from Rs.10,617.83 million in Fiscal 2024 to Rs.16,307.87 million in Fiscal 2026, a 23.93% CAGR per the Company's own disclosure, while PAT grew more than 8 times over the same period, from Rs.128.16 million to Rs.1,066.81 million, with EBITDA margin more than tripling from 2.69% to 9.68%. RoNW improved in every year of the disclosed track record (21.26% to 40.08% to 50.94%), a clean upward trend without reversal.

Key Basics

Particulars	Details
Document Type	Red Herring Prospectus (RHP) dated August 10, 2026. This is a live offer: Anchor Investor Bidding Date Monday, August 17, 2026, Bid or Offer opens Tuesday, August 18, 2026 and closes Thursday, August 20, 2026, the same window as Sunshine Pictures Limited elsewhere in this batch.
Issue Structure	100% Book Built Offer comprising a Fresh Issue of up to 2,94,82,000 Equity Shares and an Offer for Sale of up to 1,00,00,000 Equity Shares by 2 Promoter Selling Shareholders, aggregating to up to 3,94,82,000 Equity Shares. Face value Rs.5 per share.
Face Value	Rs.5 per Equity Share.
Promoters and Selling Shareholders	Kantilal Kheemraj Jain (up to 48,00,000 shares, WACA Rs.0.44) and Manoj Kantilal Jain (up to 52,00,000 shares, WACA Rs.0.37), both a tiny fraction of the likely Offer Price.
Eligibility Route	Regulation 6(1) of the SEBI ICDR Regulations, 2018, the standard main board profitability-based eligibility route.
Listing Exchange	Main board listing on both BSE Limited and the National Stock Exchange of India (NSE); BSE is the Designated Stock Exchange, with in-principle approvals from both exchanges dated December 4, 2025.
BRLMs	A 2-bank syndicate: Aryaman Financial Services Limited and Smart Horizon Capital Advisors Private Limited.
Registrar	KFin Technologies Limited.
Bid or Offer Dates	Anchor Bid: Monday, August 17, 2026. Opens: Tuesday, August 18, 2026. Closes: Thursday, August 20, 2026.
Listed Peers, One Line	2 listed peers (Shanti Gold International Limited, Sky Gold & Diamonds Limited); the Company's RoNW is more than double both.

The most important structural feature to understand before assessing the rest of this report is the Company's business model: it is a B2B design and supply house serving other jewellery retailers (some of them names investors will recognise directly, and one, Lalithaa Jewellery Mart, processed elsewhere in this report series, though not itself a disclosed customer here) rather than a direct-to-consumer retailer, which changes how its customer concentration, working capital and margin dynamics should be read relative to retail-facing peers.

How Will the IPO Money Be Used?

Object	Estimated Amount (Rs. Million)	Substantiation
Repayment or prepayment of certain borrowings	1,580.00	The largest single Object by amount, a specific rupee figure disclosed and scheduled for full deployment within FY 2026-27.
Funding working capital requirements	380.00	A specific rupee figure disclosed as a standalone Object, distinct from general corporate purposes.
General corporate purposes	[TBD]	To be finalised upon determination of the Offer Price; standard cap conventions apply.

This Issue has no capital expenditure Object: the entire identified use of Net Proceeds is debt repayment (the largest single item) and working capital, consistent with the Company's asset-light business model, which requires no owned manufacturing infrastructure since production is outsourced to third-party Karigars.

As with all RHPs at this stage, none of the fund requirements have been independently appraised by any bank or financial institution, and the Gross Proceeds, Net Proceeds and General Corporate Purposes figures remain undetermined until the Offer Price is fixed.

Financial Performance

P&L and Key Metrics (Rs. Million unless stated)

Particulars	FY 2026	FY 2025	FY 2024
Revenue from operations	16,307.87	14,038.26	10,617.83
Gross profit	1,804.04	780.68	453.80
Gross profit margin (%)	11.06	5.56	4.27
EBITDA	1,579.00	653.47	285.99
EBITDA margin (%)	9.68	4.65	2.69
Profit after tax	1,066.81	403.12	128.16
PAT margin (%)	6.54	2.87	1.21
Return on equity (%)	50.94	40.08	21.26
Return on capital employed (%)	41.57	26.28	16.46
Return on net worth / RoNW (%)	50.94	40.07	21.26
Net debt to equity ratio (times)	0.80	1.44	1.80
Net debt to EBITDA ratio (times)	1.06	2.22	3.79
Core net working capital days	81.33	62.35	58.85

Cash Flow Highlights (Rs. Million)

Particulars	FY 2026	FY 2025	FY 2024
Net cash from / (used in) operating activities	3.32	(231.05)	14.71
Net cash used in investing activities	(126.99)	(28.95)	(10.12)
Net cash from / (used in) financing activities	123.70	258.47	(4.86)

Independently recomputed, revenue grew approximately 32.2% in FY25 and a further 16.2% in FY26, reconciling with the RHP's own disclosed 23.93% 2-year CAGR, while PAT grew dramatically over the same window, more than tripling in FY25 and again more than doubling in FY26, an overall increase of more than 8 times from Rs.128.16 million to Rs.1,066.81 million.

Every margin metric improved in every single year without reversal, EBITDA margin rising from 2.69% to 9.68% and PAT margin from 1.21% to 6.54%, and RoNW climbed steadily from 21.26% to 50.94%. This is one of the cleanest, most consistent margin expansion stories in this report series. Leverage has also improved sharply: Net Debt to Equity fell from 1.80 to 0.80 times and Net Debt to EBITDA from 3.79 to 1.06 times over the 3 disclosed years, a genuine deleveraging trend running alongside the profitability improvement.

The one specific caveat is FY 2025, when the Company experienced negative operating cash flow of Rs.231.05 million despite generating operating profit before working capital changes of Rs.647.77 million that year; the Company attributes this to a Rs.390.65 million increase in trade receivables and a Rs.301.58 million increase in inventory as the business scaled, both explained by higher sales volumes and the need to maintain stock breadth.

Operating cash flow returned to positive, albeit modestly (Rs.3.32 million), in FY 2026. Core net working capital days have also risen steadily (58.85 to 81.33 days), a trend consistent with the growing scale of the business and worth monitoring as the Company continues to grow, though not yet a red flag given the parallel deleveraging and margin improvement.

How Does It Compare to Peers?

Company	Revenue FY26 (Rs. Million)	Diluted EPS (Rs.)	P/E (times)	RoNW (%)	NAV/Share (Rs.)
Shankesh Jewellers Limited	16,307.87	9.09	N/A (Price TBD)	50.94	17.82
Shanti Gold International Limited	20,187.09	21.22	10.04	23.42	83.00
Sky Gold & Diamonds Limited	62,948.87	18.07	34.86	23.37	77.80

The RHP discloses 2 listed peers in the gold jewellery manufacturing and supply space, Shanti Gold International Limited and Sky Gold & Diamonds Limited, both larger than Shankesh Jewellers by revenue (roughly 1.2 times and 3.9 times respectively).

On RoNW, Shankesh Jewellers' 50.94% is more than double both peers (23.42% and 23.37%), a dramatic outperformance, though this partly reflects the Company's smaller, more recently scaled equity base relative to these larger, more established peers, a dynamic that can inflate RoNW for fast-growing smaller companies.

Investors should also note that both peers trade at a lower NAV per share multiple relative to Shankesh's likely post-Offer NAV, though Shankesh's own P/E cannot yet be calculated pending Offer Price determination.

Key Risks

l The Company is entirely dependent on third-party Jobworkers and Karigars for production and manufacturing of all its products, none of whom work exclusively for the Company; any disruption to this network, quality lapse, or inability to secure sufficient skilled labour could directly affect the Company's ability to deliver.

l The Company has incurred significant indebtedness, and while leverage has improved sharply (Net Debt to Equity down from 1.80 to 0.80 times over 3 years), the Company remains exposed to restrictive covenants and conditions under its financing agreements, and has separately availed unsecured borrowings repayable on demand.

l The Company experienced negative operating cash flow of Rs.231.05 million in FY 2025 (reversing to a thin positive Rs.3.32 million in FY 2026), driven by a substantial increase in trade receivables and inventory as the business scaled; core net working capital days have risen steadily (58.85 to 81.33 days) across the 3 disclosed years, a trend worth monitoring as growth continues.

l Revenue and manufacturing operations are concentrated in the top 5 states (led by Tamil Nadu), and the Company's revenue is directly dependent on the commercial success of its customers' own retail businesses with end consumers, an indirect exposure the Company itself flags as a standalone risk given its B2B model.

l The Company enters into related party transactions of a meaningful scale (Rs.633.39 million in the most recent disclosed period), and occupies premises leased from a Promoter Group individual, Sushila Kantilal Jain.

l There are certain instances of non-compliance and alleged non-compliance with regulatory filings for past corporate actions, and certain outstanding legal proceedings involving the Company, its Promoters and Directors.

l The Company's top 10 customers contributed 30.48% to 39.56% of revenue across the 3 disclosed years, and the business is exposed to volatility in gold, silver, diamond and other raw material prices, which directly affects inventory value.

l None of the Company's Directors have prior experience serving on the board of a listed company, and the Company has issued Equity Shares in the last year at a price that could be lower than the eventual Offer Price.

l The Company's asset-light model, while capital efficient, means inventory is handled at third-party locations, introducing operational and security risk given the high-value commodity nature of gold jewellery.

l The Company has not paid dividends in the last 3 fiscals, and there is no assurance of future dividend payments.

l The Company relies on a limited number of designers for creating its hand-crafted jewellery designs, and its jewellery designs and intellectual property may not be fully protected from infringement.

l The Company's income and sales are subject to seasonal fluctuations typical of the jewellery industry, and industry information in this RHP is derived from a commissioned third-party report subject to inherent limitations.

Positives to Note

l Financial performance has improved consistently across every single metric in every single year of the 3 year track record: revenue, gross profit margin, EBITDA margin, PAT margin, RoE and RoNW all rose from FY 2024 through FY 2026 without a single reversal, one of the cleanest growth profiles in this report series.

l RoNW of 50.94% in FY 2026 is more than double both disclosed listed peers, Shanti Gold International Limited (23.42%) and Sky Gold & Diamonds Limited (23.37%), despite both being larger, more established companies.

l The Company has meaningfully deleveraged alongside its profitability growth, with Net Debt to Equity falling from 1.80 times to 0.80 times and Net Debt to EBITDA from 3.79 times to 1.06 times over the 3 disclosed years.

l The Company's client roster includes some of India's most recognisable organised jewellery retail names (Kalyan Jewellers, Joyalukkas, P N Gadgil Jewellers, and the Aditya Birla Group's Novel Jewels), evidencing credibility and quality standards sufficient for large, reputable corporate buyers.

l The Company's asset-light business model requires no owned manufacturing infrastructure, and this Offer's Net Proceeds accordingly carry no capital expenditure execution risk, being directed entirely at debt repayment and working capital.

l The Company's insurance coverage on insured assets (Rs.2,425.14 million) represented 365.37% of relevant exposure as at the most recent disclosed period, indicating conservative risk coverage relative to the high-value inventory the business handles.