Shanti Gold IPO subscribed 2.25x on Day 2; should you apply? Check GMP, review, and more

Shanti Gold International IPO has gathered an overall subscription of 2.25 times as of 11:10 a.m. on Day 2, with strong interest from retail and non-institutional investors. The shares of the company commanded a grey market premium (GMP) of Rs 38 in the unlisted market, pointing to a potential 19% listing gain over the upper end of the price band set at Rs 199 per share.

Shanti Gold International IPO is a fully fresh issue of 1.81 crore equity shares, amounting to Rs 360.11 crore. The IPO opened for bidding on July 25 and will close on July 29. On Day 1, the issue got off to a modest start, but picked up pace with retail investors leading the charge. On Day 2, the retail portion saw 3.49 times subscription for the 63.33 lakh shares reserved, while the Non-Institutional Investor (NII) segment was subscribed 2.48 times. QIBs, however, have so far shown limited interest, with only marginal bids received for their 36.19 lakh share allocation.

The IPO price band has been set at Rs 189–199 per share, with investors able to bid for a minimum of 75 shares, amounting to Rs 14,925 at the upper end and in multiples thereafter.

Ahead of the IPO, Shanti Gold International raised Rs 108 crore from anchor investors, with allocations going to names such as Societe Generale, Wealthwave Capital Fund, Rajasthan Global Securities, Astorne Capital VCC Arven, Shine Star Build Cap, Meru Investment Fund, and others, according to a filing on the BSE.

Shanti Gold International is a gold jewellery manufacturer, and the positive grey market sentiment suggests confidence in the company’s fundamentals, despite mixed institutional interest. The final day of bidding could still see a last-minute boost, particularly from QIBs, potentially lifting the overall subscription numbers.

Shanti Gold International, a Mumbai-based manufacturer of 22kt CZ casting gold jewellery, operates primarily on a B2B model and caters to large retail chains including Joyalukkas, Lalithaa Jewellery Mart and Alukkas.

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Its designs are sold across southern India, which currently contributes more than 70% of revenue. The firm plans to expand into North India with a new 1,200 kg manufacturing unit in Jaipur — a strategic move to enter the plain jewellery segment.

Financially, the company has shown robust growth. Revenue rose from Rs 679 crore in FY23 to Rs 1,106 crore in FY25, while net profit surged from Rs 19.8 crore to Rs 55.8 crore during the same period, reflecting a strong CAGR of 68%.

EBITDA margins have expanded steadily to 8.83%, and the return on equity (RoE) stood at a healthy 44.85% in FY25. The IPO values the company at a post-issue P/E of 19x, which is at a discount to the industry average of 23x. However, the price-to-book valuation at 7x appears slightly stretched compared to listed peers.

Should you subscribe?

Brokerages have recommended subscribing to the issue, citing strong financials, margin expansion, and a clear strategy to diversify its product mix and regional footprint.

“The company’s robust relationships with marquee jewellers, expanding design capabilities (over 400 designs/month), and controlled in-house manufacturing give it scale and brand trust in the B2B jewellery segment,” said Canara Bank Securities.

While risks such as customer and regional concentration exist, the growth momentum and business fundamentals remain attractive.

(Disclaimer: Recommendations, suggestions, views, and opinions given by the experts are their own. These do not represent the views of The Economic Times)