BlueStone Jewellery & Lifestyle Ltd. (Avoid)

Highlights

BlueStone Jewellery and Lifestyle Limited (BlueStone), incorporated in 2011, is a D2C company which offers contemporary lifestyle diamond, gold, platinum and studded jewellery under their flagship brand, BlueStone. 

As a design-led brand, BlueStone offer a variety of designs across various price points tailored to various occasions and customer preferences. They focus on designing jewellery for women, men and couples between the ages of 25 to 45 years who value unique designs, modern styles and have a tendency to discover brands through social media or online channels.

Their product offerings include (i) Rings (ii) Earrings (iii) Necklaces (iv) Pendants (v) Solitaires (vi) Bangles (vii) Bracelets and Chains cater to diverse customer segments. They had 91 collections of jewellery products.

The company is the 2^nd largest digital-first omnichannel jewellery brand in India, which commands 28-32 pct market share (FY24). As of FY25, they had 275 stores across 117 cities in 26 States and Union Territories in India, including 200 Company Stores and 75 Franchisee Stores. 

Out of the total proceeds of Rs. 15,406 mn, ~Rs. 7,500 mn would go towards funding working capital requirements, ~Rs.700 mn would go towards general corporate purpose and ~Rs. 7,260 mn would go towards the existing selling shareholders of the company.

Key Highlights

• The Indian jewellery market has grown a CAGR of 13 – 15 pct between 2021 to 2024 and currently stands at ~Rs. 6,340 bn and is projected to reach Rs. 11,000 bn – Rs. 12,000 bn by 2029, growing at a CAGR of 12 – 14 between 2024 and 2029. Organised retail drove approximately 37 pct of the Indian jewellery market in 2024. The organised segment’s contribution is projected to grow to 43 – 47 pct of the overall jewellery market, growing at a CAGR of 16 – 18 pct till 2029. 

• The company operates three manufacturing facilities located in Mumbai, Maharashtra, Jaipur, Rajasthan and at Surat, Gujarat which has combine capacity of 8067.75 Kilograms. and currently an additional manufacturing facility in Jaipur, Rajasthan is under-construction.
• Their website and mobile application allow customers to browse over 7,400 designs, as of March 31, 2025. Customers are offered with a multitude of options to discover and interact with jewellery, including browsing online, 360-degree views of products, access to contemporary designs, ability to select store locations, ability to view store inventory and an option to ‘Try at Home’ at select locations across India.
• BlueStone’s network of stores comprised 200 Company Stores and 75 Franchisee Stores with an aggregate area of over 605,000 square feet. All Franchisee Stores are operated by the company and company incur all operating expenses and manage the inventory for such stores.
• The company has adopted policies such as 30-day money back, lifetime exchange and buyback of jewellery. Their Big Gold Upgrade offer aims to provide customers with the best possible value for their old gold while allowing them to upgrade to new pieces of jewellery.
• The company intend to continue to expand their omni-channel presence by establishing over 290 new stores between FY25 to FY27. Their expansion of stores will be driven by penetration across existing cities as well as expanding geographic reach across city tiers in India. 75 pct of their stores are break-even within three months of commencing operations and their average revenue per store stood at Rs. 7.68 mn.
• BlueStone’s key growth strategies include (i) Expand Omni-channel presence (ii) Focus on becoming a lifecycle jeweller (iii) Invest in brand building initiatives (iv) Continue to leverage technology (v) Scale their old gold exchange program.
• In FY25 the company reported sales of Rs. 17,700 mn, rose 39.8 pct YoY. EBITDA of the company jumped 37.92 pct YoY to Rs. 8,270 mn while margins shrank 1 bps to 4.1 pct.  During FY25 the company posted loss of Rs. 2,218 mn against the loss of Rs. 1422 mn in FY24. As per company, this is primarily on account of the fact that their business has been in growth and expansion mode requiring significant upfront investments towards creating a retail network, distribution channels, advertising and marketing and working capital requirements.

Key Risk

• Promoter has pledged certain of his equity shares with certain lenders. Any exercise of such pledge by the lender could dilute his shareholding. 
•  The growing prevalence and popularity of lab-grown diamonds could have an adverse impact on their business, financial condition and results of operations.
• BlueStone has received certain summons and requests for personal appearances from ED in relation to certain investments received by the company.

Financial Performance

Peer Comparison based on FY25 Financials

Valuation

BlueStone is India’s leading destination for high quality fine jewellery with strikingly exquisite designs and revolutionizing the fine jewellery and lifestyle segment in India with a firm focus on craftsmanship, quality and customer experience. At the upper end of the price band of Rs. 517, the issue is priced at an EV/EBITDA of 125.2x and EV/Sales of 5.14x of its FY25 earnings on post issue equity capital. The issue appears to be fully priced. One can avoid this issue.

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