Shankesh Jewellers IPO: Caught in a Gold Rush

_{The following article is for educational purposes ONLY. Each and every piece of information used henceforth in this article is sourced from the RHP.}

Shankesh Jewellers Limited is filing a ₹367 Cr IPO on August 18, 2026. Shankesh has run its entire hand-crafted gold jewellery business without owning a single factory for 34 years, outsourcing every piece to a network of Mumbai jobworkers, and its client list includes Kalyan Jewellers, Joyalukkas and P.N. Gadgil & Sons, some of India's largest listed jewellery retailers.

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India’s gems and jewellery industry contributes close to 7% of the country’s GDP.

On the manufacturing side, unorganised manufacturers still supply around 87% of India’s wholesale gold jewellery as of CY25, with organised players such as Kalyan Jewellers, Malabar Gold and Diamonds, Joyalukkas and Titan’s Tanishq making up the rest.

Shankesh Jewellers operates within the wholesale manufacturing segment of this industry, supplying hand-crafted gold jewellery to jewellers across India.

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The company is a B2B supplier of hand-crafted gold jewellery and does not manufacture in-house.

Its design team creates jewellery designs, and production is handed to a network of third-party jobworkers, who in turn engage skilled karigars (artisans) to craft the finished pieces.

The company acts as a middleman between manufacturers and retailers:
Sources bullion → manages design → outsources making to jobworkers→ checks quality of pieces → delivers to clients.

The product range covers jewellery across diverse categories such as Antique, Semi-Antique, Calcutta, Temple and Gheru jewellery, made in 22-karat and 18-karat gold.

Shankesh sells to two kinds of clients:
1. Corporate Clients: They consist of organised retail chains such as Joyalukkas India, P.N. Gadgil & Sons, Kalyan Jewellers India, P N Gadgil Jewellers, Manoj Vaibhav Gems ‘N’ Jewellers and Novel Jewels of the Aditya Birla Group.

2. Non-Corporate Clients: They are smaller independent jewellers.

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(Refer disclaimer at the bottom)

Unit Economics

• The jump in per-gram revenue and profit is due to rise in gold prices. In reality the quantity of gold processed actually fell, from 1,936 kg in FY25 to 1,397 kg in FY26, even as revenue rose 16%.

Look at the below table to help you understand better as to how increase in gold price helps increase their overall revenue (Revenue = Units sold x Price)

• Revenue by client type: Corporate clients now contribute ~64% of revenue, up from just over half in FY24.

• Jobworker network: The jobworker base has shrunk each year. This trend is worth watching given the industry’s reliance on informally trained karigars.

• Repeat customer rate: The total client count declined slightly to 418. This year’s growth came almost entirely from more business with existing repeat clients.

• Shankesh Jewellers is the smallest of the three by revenue but posts the highest ROE and PAT margin in FY26, though this partly reflects the timing of the gold price cycle discussed in the unit economics section rather than a superior model.

Dependence on third-party jobworkers
The company owns no manufacturing capacity and relies entirely on third-party jobworkers to make their products.

Gold price volatility
As a business built around processing physical gold, the value of inventory, working capital requirements and sales volumes are all sensitive to swings in gold prices.

Shankesh Jewellers is a three-decade-old, B2B supplier of hand-crafted gold jewellery to large organised retail chains and independent jewellers across India.

Profitability has improved over the years, aided by a rise in gold prices rather than a change in the business model.

Whether the FY26 margin and return levels hold will depend on the trajectory of gold prices, the durability of the company’s relationships with its clients and its ability to manage jobworker network.

_Disclaimer

_{This content is based on publicly available information contained in the Red Herring Prospectus (RHP) and is intended solely for educational and informational purposes. It should not be construed as investment advice, recommendation or solicitation to invest.}

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_{Source: Red Herring Prospectus (RHP) of Shankesh Jewellers}