Deepa Jewellers Ltd

Deepa Jewellers designs 22 karat gold jewellery and sells it to retailers across South India, with its largest product being vaddanam (a gold waist belt worn at weddings) at 42% of FY26 revenue. Revenue rose 88.0% between FY24 and FY26, while the gold price rose 91.3% and the quantity of jewellery sold fell 5.5%, so the surge in gold prices accounts for almost all of it. Working capital climbed from ₹158 cr to ₹345 cr over two years and profit has not turned into cash, with cumulative operating cash flow of negative ₹19.7 cr against ₹180 cr of post-tax EBITDA. A business with an 8% gross margin, no manufacturing of its own, growth that came from gold rather than from volume, and profits that have not turned into cash does not offer us enough comfort at an IPO ask of 16.2x P/E and 10.7x EV/EBITDA. 

At the current GMP of ~14% (3 September 2026), the issue points to modest listing gains at best, if it sustains. However, it is important to note that GMP has been a poor guide of late and has been unstable. For example in recent IPOs: Skyways Air Services had a 30% GMP and listed 10% below its issue price, Symbiotec Pharmalab carried 27% and listed flat, and Annu Projects carried 8% and listed 24% below issue.
