BlueStone Jewellery Set to Debut on Stock Exchange August 19

BlueStone Jewellery and Lifestyle Ltd is scheduled to launch its shares on the stock exchanges on August 19, 2023, following a successful initial public offering (IPO) that was oversubscribed by 2.7 times during the bidding period from August 11 to 13. The price band for the IPO was set between Rs 492 and Rs 517 per share, reflecting strong interest from investors.

The Bengaluru-based company, known for its contemporary jewellery brand, had previously secured over Rs 693 crore from anchor investors before the IPO. Despite the positive reception, market analysts suggest that the shares may debut with modest gains, as indicated by grey market activity showing flat premiums.

Market Insights and Investor Sentiment

Analysts highlight that while BlueStone’s extensive omni-channel presence—boasting over 275 stores across 117 cities—positions it well in a competitive landscape, several concerns remain. Notably, the company has reported widening net losses and a weak margin profile, which have raised caution among potential investors despite consistent revenue growth over the past three years.

Bhavik Joshi, Business Head at INVasset PMS, remarked, “BlueStone’s capital efficiency, inventory turns and store-level breakeven timelines will likely dominate post-listing conversations. For long-term confidence, the company will need to demonstrate profitability and discipline in execution.”

Market participants have noted that the retail response has been lukewarm, coupled with subdued signals from the grey market, indicating limited enthusiasm for the listing day. However, the strength of institutional support during the IPO process has been a positive factor.

BlueStone intends to utilize the proceeds from the fresh issue to meet working capital requirements and for general corporate purposes. Since its inception in 2011, the company has expanded significantly, establishing a network of 275 stores across 26 states and Union Territories, covering over 12,600 PIN codes. Additionally, it operates three manufacturing units located in Mumbai, Jaipur, and Surat.

In summary, while BlueStone’s upcoming listing is anticipated with cautious optimism, the company will need to address its profitability challenges to instill long-term confidence among investors.