A Rs 2000 Cr IPO Likely For BlueStone Jewellery

The jewellery industry in the country is one of the fastest growing segments of the Indian economy. BlueStone Jewellery jumped at the chance and entered the market but they took a non-traditional route. BlueStone launched as an online-first jewellery brand that offers an unmatched collection of certified jewellery to be browsed at leisure and purchased from the comfort of your home.

The prominent jewellery E-commerce B2C business is backed by industry stalwarts like Ratan Tata, Nikhil Kamath, and more. BlueStone Jewellery is seeking pitches from investment bankers to underwrite and market an Initial Public Offering (IPO) worth approximately Rs 2000 Crores.

The online-first jeweller is seeking pitches from investment bankers to market the IPO that is likely to involve diluting a 10-15 per cent stake, comprising a fresh issue of shares and an offer for sale (OFS). The startup initially planned to go public in 2022 but postponed the plans and instead raised funds from private equity (PE) firms.

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The Market Position

This IPO is coming at a time when BlueStone Jewellery is establishing itself as a leading contender in the industry. The brand wishes to stand strong alongside publically listed giants such as Kalyan Jewellers, Titan’s Tanishq brand, and Senco Gold. Senco – the latest listed entity in the sector, is currently trading at a valuation of Rs 5,908 crore, which is a 141% premium to its IPO price in July last year.

The Business Idea

The Bangalore-based online jewellery startup offers jewellery under its own brand name. BlueStone.com founders Gaurav Singh Kushwaha and Vidya Nataraj saw an opportunity for a relatively untouched category in the e-commerce market such as jewellery.

BlueStone is a classic case of how the internet and technology are transforming a traditional capital-intensive industry like jewellery with lean operations and a just-in-time inventory model. This way, high maintenance and inventory costs and other logistical challenges faced by traditional brick-and-mortar jewellery retailers could be avoided.

The Investors & The Investments

Founded in 2011, BlueStone Jewellery is backed by prominent investors including Ratan Tata, Accel, Kalaari, Iron Pillar, IvyCap, Nikhil Kamath, and Saama Capital. Ratan Tata had invested in Bluestone about a decade ago – in Sept 2014.

And last year, it was reported that Zerodha co-founder Nikhil Kamath invested Rs 100 crore into BlueStone. It is anticipated that a portion of the current private equity investors will sell all or part of their holdings through the IPO. 

Last year, BlueStone attracted ₹550 crore in investments from a mix of longstanding and new investors. The likes of Nikhil Kamath, Ranjan Pai, 360 One, and current Shark Tank India judges Amit Jain and Deepinder Goyal invested in the business. This brought the startup’s net valuation close to $440 million. This followed a $30 million funding round in 2022 led by Sunil Kant Munjal of Hero Enterprise, valuing the company at $410 million.

The Sales Strat

Presently, BlueStone has over 180 points of sale (POS) nationwide while offering an extensive catalogue of over 8,000 unique jewellery designs. The company has manufacturing units in Mumbai and Jaipur, among other locations. Expanding its retail footprint, the company entered the offline space with its debut store in Delhi’s Pacific Mall in 2018. It then expanded to five additional locations across Mumbai, Hyderabad, and Chandigarh.

BlueStone Jewellery reported a 67 per cent increase in operating revenue at ₹771 crore for the year ended March 2023 against ₹461 crore in FY22. With a successful business model which is scalable and multi-millionaires backing the brand, the future definitely looks very bright for BlueStone Jewellery. We wait and watch if this sizable IPO actually goes though.