Companies
BlueStone appoints Axis, IIFL and Kotak for planned initial public offering next year
Summary
Investor interest in the jewellery sector is increasing, driven by growing disposable incomes coupled with a rise in the young middle-class population.
Bengaluru: New-age jeweller startup BlueStone has appointed Axis Capital, IIFL Securities and Kotak Mahindra Capital Co to help with a planned $250 million ( ₹2,000 crore) initial public offering by the second quarter of next year, according to a person with knowledge of the matter.
“The IPO is likely to be around $200-$250 million in size at a valuation of $1-1.5 billion and the company expects to file its papers later this year," the person said.
If the public offering goes ahead as planned, it is likely to be the first by a new-age jewellery startup. BlueStone and the investment banks did not immediately respond to Mint’s requests for comment.
In August, BlueStone closed a ₹900 crore pre-IPO funding round that more than doubled its valuation to $970 million, according to a report by The Economic Times. The round was a mix of primary and secondary transactions with one of the early investors – Kalaari Capital – selling some of its stake. The business daily reported in February that BlueStone was planning a ₹2,000 crore IPO.
Operating under the parent's name - BlueStone Jewellery and Lifestyle Pvt Ltd, it competes with Melorra, Giva and CaratLane. India’s new-age jewellery space has been bustling with investor activity over the past year.
Also Read | Senco Gold in advanced talks to buy Melorra as it takes a shine to e-commerce
While Giva closed a ₹255 crore funding round earlier this week, Mint exclusively reported earlier this month that Melorra received a bid to be acquired by Kolkata-based jeweller Senco Gold Ltd, which listed last year. Titan bought out the remaining stakes in CaratLane, making it a wholly owned subsidiary in February.
There is increased investor interest in this sector, driven by growing disposable incomes coupled with a rise in the young middle-class population. This has benefited new-age companies, unlike conventional firms such as Malabar Gold & Diamonds and Kalyan Jewellers, which continue to dominate the wedding jewellery market.
Store expansion
Founded by Gaurav Singh Kushwaha, Sudeep Nagar and Ganesh Krishnan in 2011, BlueStone offers products such as bangles, bracelets, rings, earrings, chains, pendants, and nose pins. The company started as an online-only channel before it opened stores in 2018.
Also Read | How Tanishq broke into the bridal jewellery market in India
Currently, it has over 200 stores in various locations in India and will expand as consumers adopt hybrid methods of shopping. The company has localised production, design and manufacturing, which has enabled it to have tighter control on costs.
In FY24, BlueStone’s revenue rose 65% to ₹1,303.4 crore from ₹787.8 crore in the previous year. Its loss narrowed by almost 15% to ₹142.2 crore. The Bengaluru-based company counts Accel – its largest institutional investor - Prosus, Peak XV Partners, Iron Pillar and Steadview Capital among its backers.
India’s retail jewellery market was estimated at almost $80 billion in FY24, according to a report by Motilal Oswal published in June. Organised retail accounted for about 36-38% of the market and comprised both pan-India and regional companies.
Motilal Oswal estimated that the market is expected to clock a 15-16% compounded annual growth rate to reach $145 billion by FY28, driven by better experience at organised retail outlets, rising disposable incomes, enhanced product offerings and an improving mix for regular wear.
Also Read | Caratlane: Anatomy of a glittering exit
