Gold Rush on Dalal Street: Jewellery IPOs Soar as India's Gold Market Booms

The Indian jewellery market is experiencing a boom, driven by record-high gold prices and a shift towards trusted brands. Over the past two years, 21 jewellery companies have gone public to fund ambitious expansion plans, with another 12 mainboard and nine SME players expected to follow suit.

However, this IPO frenzy comes at a precarious time for the industry. While revenue growth is artificially inflated by high gold prices, actual physical demand is shrinking. Prithviraj Kothari, Managing Director at RiddiSiddhi Bullions and President of the India Bullion and Jewellers Association Ltd (IBJA), notes that steep gold prices are hurting jewellery sales volume, even as sales value keeps rising.

Industry experts attribute the IPO rush to the formalisation of the previously unorganised industry. CA Surendra Mehta, National Secretary, IBJA, explains how the lack of formalisation had impacted the industry in the past: 'Even banks were not giving industry status to jewellers. Now jewellers are becoming organised and compliant, and they are eligible to go for IPOs.'

However, this growth reflects price appreciation rather than sales. Nitant Darekar, research analyst at Bonanza, cautions that the industry faces a key challenge: 'The current market is best characterised as volume-sensitive but value-resilient, with demand becoming more selective rather than weakening uniformly.'