Gold, growth and IPOs: Why jewellery companies are rushing to list on D-Street — explained

Jewellery sector stocks are in focus of investors lately, with companies coming out with their initial public offerings (IPOs), while listed stocks benefit from elevated precious metal prices in the market amid geopolitical uncertainties.

After a healthy June quarter (Q1) performance, the key factor to watch in the Indian jewellery sector is now, companies which are able to stand out in terms of volume growth at a time when everyone is gaining from the higher metal prices.

Higher prices of precious metals like gold, silver, etc., in the market, in turn, help power the overall top-line revenue growth in a period as companies will be selling their products at a higher cost to customers.

Gold prices have remained volatile in the global market with investor periodically seeking for safer assets resulting in a more than 9% rise in the past one month period above $4,400 per 100 troy ounces.

Experts predict that while consumer volumes and affordability of customers remain a concern for jewellery companies due to the higher price, the upcoming festive season demand and wedding season consumption will be a key tailwind for the sector.

During the upcoming festive seasons of Durga Puja, Diwali, others in India, jewellery companies benefit from the elevated demand in the market, which in turn increases the overall sales in the period.

So, while festive season demand is a key tailwind, the sector is also set to witness price pressure and volatility headwinds, which can weigh down the affordability factor for jewellery, postponing customer purchases.

Why are jewellery companies hitting Dalal Street?

Jewellery companies like Deepa Jewellers and Priority Jewels are now set to hit the market soon, as investors might be thinking about the reason behind the sector buzzing in the primary market on Dalal Street.

Market experts predict that this is more of a formalisation and consolidation activity for the companies in an otherwise highly fragmented jewellery industry in India.

A public listing on the Indian equity markets gives these jewellery companies the opportunity to access capital and expand their market presence.

“The IPO activity reflects the formalisation and consolidation of India’s highly fragmented jewellery sector. It gives organised players access to capital to expand their retail footprint and brands, while giving investors greater visibility into the sector,” said Saikat Kumar, Partner & Board Member, Red Lions Capital DIPMarket.

So while unorganised trade chooses regulated capital, Kumar also highlighted that the key differentiators among companies will be valuations, inventory turns, cash generation and return on capital, which the investors should closely monitor in the upcoming period.

“The sector-level read is positive because listed float and disclosure improve price discovery across the whole category, while the investor-level read is more careful,” Harshal Dasani, Business Head at INVasset PMS. “Judge each on inventory turns and gold-price hedging policy, not on the sector narrative.”

Jewellery stocks in focus

What does TBZ acquisition mean for the sector?

In an exchange filing on August 31, Tribhovandas Bhimji Zaveri (TBZ) disclosed that the company is selling a 74.12% stake to one of India’s leading jewellery retail companies, GRT Jewellers Pvt. Ltd, for a total consideration of ₹1,033.71 crore.

After the acquisition move, the share purchase agreement will also allow the company to launch an open offer for another 26% stake buyout as per the guidelines mandated by the capital markets regulator, SEBI.

Due to the acquisition update, TBZ shares rallied to their maximum limit of 20% and were locked in an upper circuit at ₹366.80 on the National Stock Exchange on the same day on Tuesday, September 1.

Market experts reviewed that TBZ’s acquisition is the “most instructive corporate event” for the jewellery industry this year, as the strategic buyout was a likely result of capital and scale surpassing what a legacy family business balance sheet can carry.

The acquisition also highlights that it's somewhat more of a geography and brand acquisition rather than a financial one, as GRT is a large south-based unlisted player which just purchased distribution and a heritage name in a new market.

“For minority shareholders, the open offer sets the near-term price anchor, and the harder question of whether the combined entity earns its cost of capital only gets answered after integration,” said Harshal Dasani, Business Head at INVasset PMS.

What’s next for jewellery stocks?

Analysts from global investment major HSBC predict that the daily-wear jewellery segment is expected to witness a high-growth phase in the upcoming period, with the margin profile and studded mix similar for most regional players in the market.

Looking ahead, Saikat Kumar, Partner & Board Member, Red Lions Capital DIPMarket, said that while the outlook for the sector remains constructive, investors should differentiate between the revenue gains from higher precious metal prices and the genuine growth parameters.

“We remain constructive but selective. Festive and wedding demand, alongside the structural shift towards organised jewellery retail, should support growth. However, investors should distinguish between revenue growth driven by higher gold prices and genuine volume, market-share and profitability gains,” said Saikat Kumar.

On the near-term risk front, Harshal Dasani, Business Head at INVasset PMS, said that the risk is not demand but the multiple factor, as any correction in metal prices can provide relief to customers but not the companies.

“The near-term risk is not demand; it is the multiple. Several names already discount a flawless festive season. The framework favours waiting for the volume line rather than the value line to confirm, and treating any gold correction as the point of maximum discomfort for jewellery equities even though it is the point of maximum relief for the customer,” said the expert.

PM Modi’s appeal

In a social media post on September 1, Prime Minister Narendra Modi reiterated his appeal to the people of India to avoid purchasing gold unless necessary and also avoid travelling to foreign destinations in an effort to conserve foreign exchange in the country.

PM Modi’s renewed call to curb gold purchases comes at a time when India’s gold imports surged more than 32% in the first four months of the financial year 2026-27.

According to media reports, gold imports surged to $15.17 billion in the period, in comparison to ₹11.46 billion in imports in the corresponding period a year earlier.

What should investors track?

Key focus of investors now should remain on volume growth, inventory, and margins rather than outright revenue, as it will show the actual growth story of whether or not customers are actually buying from the companies.

Market experts unanimously said that with the elevated price of precious metals in the market, the reported revenue growth alone can be somewhat misleading for investors.

“Ultimately, companies that combine brand strength with disciplined capital allocation and sustainable cash generation are likely to stand out,” Saikat Kumar told Upstox.

Apart from these fundamentals, key focus will also remain on the macroeconomic overlay in the market, which can impact companies despite a healthy demand trend from the upcoming festive season.

Investors will also be monitoring the prices of precious metals in the market, such as gold, silver, platinum, etc., to note any potential change in the trend, which can eventually have a downward impact on company margins.