Shanti Gold International

• Shanti Gold International is coming out with a 100% book building; initial public offering (IPO) of 1,80,96,000 shares of Rs 10 each in a price band Rs 189-199 per equity share.
• Not more than 50% of the issue will be allocated to Qualified Institutional Buyers (QIBs), including 5% to the mutual funds. Further, not less than 15% of the issue will be available for the non-institutional bidders and the remaining 35% for the retail investors.
• The issue will open for subscription on July 25, 2025 and will close on July 29, 2025.
• The shares will be listed on BSE as well as NSE.
• The face value of the share is Rs 10 and is priced 18.90 times of its face value on the lower side and 19.90 times on the higher side.
• Book running lead manager to the issue is Choice Capital Advisors.
• Compliance Officer for the issue is Vrushti Parag Shah.

Profile of the company

Shanti Gold International is one of the leading manufacturers of high-quality 22kt CZ casting gold jewellery, in terms of installed production capacity, specializing in the design and production of all types of gold jewellery. The company offers a wide range of high-quality, intricately designed pieces, including bangles, rings, necklaces, and complete jewellery sets across various price points ranging from jewellery for special occasions, such as weddings to festive and daily-wear jewellery. Founded as a partnership firm in 2003, its business was established by its Promoters, Pankajkumar H. Jagawat and Manojkumar N. Jain, who have over 20 years of experience in the jewellery industry. It currently offers wide range of designs and products of 22kt CZ gold jewellery.

It has a fully integrated in-house manufacturing setup, which enables it to exercise control over the quality of products and meet the standards expected by its customers. All aspects of design, manufacturing, and packaging have been carried out in-house, enabling it to create jewellery tailored to its clients' preferences. Its manufacturing and processing operations are carried out using machines such as casting machines, steamers, induction melter, air compressors, etc. Additionally, a significant portion of its production process relies on outsourced labour, particularly for the manual setting of stones, which requires precision and craftsmanship.

The company’s manufacturing facility spans over 13,448.86 square feet area in Andheri East, Mumbai (Andheri Manufacturing Facility), equipped to produce variety of jewellery with precision and efficiency. Presently, it has an installed manufacturing capacity of 2,700 kg per annum. It is known for its craftsmanship, innovative designs, and robust manufacturing capabilities.

Proceed is being used for:

• Funding of capital expenditure requirements towards setting up of the Proposed Jaipur Facility
• Funding working capital requirements of the company
• Repayment and/or pre-payment, in full or part, of certain borrowings availed by the company
• General corporate purposes

Industry Overview

The Indian gems and jewellery industry is a significant pillar of the national economy, contributing approximately 7% to the country’s GDP and around 15% of total merchandise exports. The sector is expected to grow steadily, driven by domestic consumption and international demand. India holds a prominent position globally, being the largest diamond cutting and polishing hub, producing over 90% of the world’s polished diamonds. The industry comprises various segments, including gold jewellery, diamond jewellery, coloured gemstones, and studded jewellery, with gold jewellery dominating the market. Gold plays a vital cultural and religious role in India, symbolizing prosperity and wealth, and is an essential part of weddings, festivals, and other ceremonies. Geographically, the manufacturing base is concentrated in key states like Maharashtra, Gujarat, and Tamil Nadu.

India's gems and jewellery market is one of the largest and most vibrant in the world, deeply embedded in the country's cultural and economic life. The market can be divided by material type, with gold, diamonds, gemstones, and other materials each playing a significant role in its diversity and value. In 2023, gold was the dominant material in India's gems and jewellery market, making up 81.8% of the total market share. It was followed by diamonds (9.7%), silver (4.6%), and other materials (3.9%). In 9MCY24, the total domestic demand for gold (including jewellery, bars, and coins) was estimated at 537 tonnes as compared to 494 tonnes in 9MCY23. In CY23, the gold demand was 761 tonnes, a decline of 1.7% y-o-y over CY22, this was primarily due to a 15% y-o-y increase in gold prices. The jewellery segment continued to be the largest contributor and accounted for 76% of the gold demand in India, while bars and coins accounted for the balance. The gold jewellery demand declined by 4.1% y-o-y in CY23. The demand was impacted due to increasing gold prices.

Meanwhile, India’s retail gems and jewellery market is experiencing significant growth, driven by changing consumer behaviours that combine traditional preferences with modern trends. This market holds deep cultural and economic importance, particularly as gold jewellery is viewed both as an investment and a symbol of status. While local, unorganized jewellers still dominate much of the industry, there is a strong trend towards organized and branded retailers. Consumers are increasingly prioritizing trust, authenticity, and certified products. A major trend is a growing demand for branded and certified jewellery, particularly among younger buyers who value authenticity and reliability. As a result, organized players are expanding, especially in tier-II and tier-III cities, where rising disposable incomes and urbanization are enhancing consumer interest in luxury and semi-luxury items. Additionally, younger demographics are driving the demand for lightweight, daily-wear jewellery that is versatile enough for both casual and formal occasions, marking a shift away from the heavy, traditional pieces that used to dominate the market.

Pros and strengths

Wide range of jewellery designs driven by team of experts: The company’s jewellery business includes the designing and production of 22 Kt CZ gold jewellery. It offers a wide range of high quality, intricately designed pieces, including bangles, rings, necklaces, and complete jewellery sets across various price points ranging from jewellery for special occasions, such as weddings to festive and daily-wear jewellery. It has primarily focused on its ability to develop and manufacture a wide variety of jewellery designs that cater to the diverse tastes of its clients.

Complete in-house manufacturing: The company has fully integrated in-house manufacturing setup, which enables it to exercise greater control over the quality of products and meet the standards expected by its customers. All aspects of design, manufacturing, and packaging have been carried out in-house, enabling it to create jewellery tailored to its clients' preferences. Its manufacturing and processing operations are carried out using machines such as casting machines, steamers, induction melter, air compressors, etc. Additionally, a significant portion of its production process relies on outsourced labour, particularly for the manual setting of stones, which requires precision and craftsmanship.

Financially stable business model: The company has organically grown its operations and has demonstrated an increase in revenues and profitability. Its focus on operational and functional excellence has contributed to its track record of healthy financial performance.

Established relations with corporate and jewellery businesses: The Indian retail sector is one of the fastest-growing sectors. It has the largest consumer base, and as a result, the industry’s market size has been increasing significantly. Further, robust demand, increasing investments, innovations, and government initiatives fuelled India’s retail growth. Over the years, the company has developed and established sustained relationships with its clients, including Corporate Clients, enabling it to effectively address the distinct needs of its clients’ segments.

Risks and concerns

Maximum revenue comes from limited customers: A significant portion of its revenue from operations is derived from a limited number of clients. The company has garnered 34.49%, 36.43% and 33.17% of its total revenue from top 10 customers in FY25, FY24 and FY23 respectively. The company expects that it will continue to be reliant on its top customers for the foreseeable future. There can be no assurance that its top customers will continue to place similar orders with it in the future as they had placed in the past. A significant decrease in business from such top customers, whether due to circumstances specific to such customer or adverse market conditions or the economic environment generally, may materially and adversely affect its business, results of operations and financial condition.

Maximum revenue generation is concentrated in the Southern India: A significant portion of its current presence is in the Southern Indian states of Tamil Nadu, Andhra Pradesh, Karnataka, Telangana and Kerala. The company has garnered 72.76%, 79.89% and 71.13% of its total revenue from South India in FY25, FY24 and FY23 respectively. This regional preference for gold jewellery in Southern India has significantly influenced the Company’s business strategy, market presence, and financial performance. However, its heavy reliance on these regions exposes the company to a variety of risks, including economic vulnerability of these regions, shifts in consumer behaviour, geopolitical, regulatory and local market risks such as natural disasters, infrastructure issues, or political instability, which could disrupt supply chains, operations, and sales in these regions. While it has not faced any such instances in the past, the occurrence of such events could adversely affect its business, results of operations, cash flows and financial condition.

Business is subject to significant seasonal fluctuations: The company’s business is subject to significant seasonal fluctuations, which can affect its sales, income, and overall financial performance. Historically, the demand for gold jewellery is driven by cultural events, festivals, and wedding seasons, which vary throughout the year. It generates the highest amount of revenue in the month of August followed by the month of January since the exhibition for the India International Jewellery Show is held in the months of August and January and January also marks the beginning of the wedding season in India. Further, seasonal fluctuations can also create cash flow volatility. While it may generate significant revenue during peak periods, the off-season may lead to lower sales, affecting its working capital. If it is unable to manage its cash flow effectively during slower months, it may strain its ability to meet operational expenses and fulfill obligations.

Dependent on its manufacturing capabilities at Andheri Manufacturing Facility: The company operates from its Andheri Manufacturing Facility, situated at Mumbai, Maharashtra with an area of 13,448.46 sq. ft. Its Andheri Manufacturing Facility is equipped to produce variety of jewellery with precision and efficiency. Any significant malfunction or breakdown of its equipment or machinery may involve significant repair and maintenance costs and cause delays in its operations. While there have been no such instances in the three preceding Fiscals, any such incidence in future may adversely affect its manufacturing operations and production, which may give rise to disputes with its customers and the occurrence of such events could adversely affect its business, operations, cash flows and financial condition.

Outlook

Shanti Gold International is engaged in the business of manufacturing gold jewellery. The company manufactures high-quality 22kt CZ casting gold jewellery, specialising in design and production. The company has wide range of jewelry designs driven by a team of experts. The company has complete in-house manufacturing. On the concern side, the company’s significant revenue comes from top 10 customers and any loss of one or more of its top customers could adversely affect its business, results of operations, financial condition and cash flows. Moreover, a significant portion of its business operations and revenue generation is concentrated in the Southern India. This regional concentration could expose the company to economic, cultural, geopolitical and local market risks.

The issue has been offering 1,80,96,000 shares in a price band of Rs 189-199 per equity share. The aggregate size of the offer is around Rs 342.01 to Rs 360.11 crore based on lower and upper price band respectively. Minimum application is to be made for 75 shares and in multiples thereon, thereafter. On performance front, the company’s revenue from operations has increased by 55.52% to Rs 11,064.07 million in Fiscal 2025 from Rs 7,114.34 million in Fiscal 2024. The increase in revenue from operations is majorly attributable to increase in sale prices of gold jewellery and increase in sales volume. The company recorded an increase of 107.84% in profit after tax from Rs 268.68 million in Fiscal 2024 to Rs 558.42 million in Fiscal 2025.

The company aims to capitalize on the growth opportunities within the jewellery industry by leveraging its current scale of operations, network of suppliers, and customer base. Its experienced Promoters play a pivotal role in guiding its strategic initiatives and assisting it in capitalising on the evolving market landscape. Further, the company plans to leverage its relationships with its existing client base as a foundation for growth, while also focusing on expanding its presence with new clients, including Corporate Clients, in the near future. Tailoring the product offering in line with the market trends and customer preferences to meet the needs of large-scale clients will help it position the company as a trusted partner in the corporate sector. Through active participation in exhibitions, it intends to establish partnerships and collaborations with jewellery businesses, and expand its network and customer base.