Lalithaa Jewellery Mart prepares to launch its ₹1,700 crore IPO, with mixed analyst views highlighting valuation discounts, cash flow risks and market optimism driven by Grey market signals.
Lalithaa Jewellery Mart is set to open its ₹1,700 crore initial public offering on August 17, with the issue closing on August 19 and a price band of ₹190 to ₹201 a share. At the top end, the South India-focused jeweller is seeking a valuation of about ₹11,250 crore through an issue that combines a fresh sale of shares worth up to ₹1,200 crore with an offer for sale of up to ₹500 crore. According to Business Standard, the float will be closely watched because brokerages are split on whether investors should back the offer or wait for more evidence of consistent post-listing performance.
Swastika Investmart has urged investors to subscribe, arguing that Lalithaa is valued at a steep discount to larger organised rivals such as Kalyan Jewellers and Titan on a price-to-earnings basis. The brokerage also pointed to the company’s return on equity of more than 41 per cent, which it said compares favourably with peers. Even so, it flagged a heavy cash burden from expansion, noting that operating cash flow turned negative at ₹397.7 crore in FY26 as the company stocked inventory for new stores. Swastika also said a ₹1,066 crore GST dispute and promoter-related issues remain important risks.
SBI Securities was more cautious, assigning a neutral view. It said Lalithaa posted revenue, EBITDA and profit after tax compound annual growth of 22 per cent, 60 per cent and 68 per cent respectively between FY24 and FY26, while EBITDA margin reached 6.5 per cent in FY26, up 240 basis points from a year earlier. But the brokerage said much of that recent momentum has been helped by rising gold prices, which fed directly into margins because the company does not hedge. It warned that profitability could soften if bullion prices stabilise.
Grey market signals have been positive, with the shares trading at ₹239, implying a premium of ₹38, or about 19 per cent, over the issue’s upper price band, according to websites tracking unofficial trading. Proceeds from the fresh issue are earmarked mainly for opening 10 new branches and for general corporate purposes. Founded in 1985, Lalithaa operates 61 stores across 51 cities in Tamil Nadu, Andhra Pradesh, Telangana, Karnataka and Puducherry, up from 56 stores cited in its earlier draft filings. Reuters-style market watchers will also note that the company had reported consolidated revenue of ₹12,594.67 crore and profit after tax of ₹262.33 crore for the nine months ended December 31, 2024, underlining both its scale and the growth story behind the offer.
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