Arjun Jewellers Limited IPO

01At a glance

What the company does: sells gold, silver, platinum and diamond jewellery, bridal, festive and daily wear, from four showrooms in the Saurashtra region of Gujarat, three in Rajkot and one in Jamnagar, with a fifth due to open (AP p.3).

Who pays it: retail customers; the business is almost entirely business-to-consumer, and customer concentration is not applicable (AP p.3).

Why it is raising money: ₹1,600 million for working capital, mainly inventory for existing and new showrooms, and the rest for general purposes (AP p.5).

How fast it has grown: revenue from ₹2,803 million in FY24 to ₹5,955 million in FY26, and profit from ₹62 million to ₹272 million (AP p.6).

The one thing to understand: a fast-growing, thin-margin retailer that has never generated operating cash, and that now faces an income-tax inquiry. Operating cash flow was negative in each of the last three years, and in May 2026 the tax department alleged that some cash sales had been split into invoices below ₹0.20 million each (AP p.6, DRHP p.28).

02The business, in plain words

A jewellery retailer buys finished jewellery from manufacturers, displays it in showrooms, and sells it at the gold price plus a making charge. The biggest demand on money is the stock on display, which must grow with every new store.

A family in Rajkot shops for wedding jewellery → it visits an Arjun Jewellers showroom → the company, which buys its pieces from suppliers in Gujarat and Maharashtra, sells at the metal price plus making charges → the customer pays in the showroom.

The company buys all its products from third-party suppliers, mainly in Maharashtra and Gujarat, without long-term contracts (AP p.7). Its showrooms had 787.23 square metres of operating area at June 2026 (AP p.3).

Earnings equation: Profit ≈ sales × (making margin + metal margin) − store costs − interest. Net margin was 4.57% in FY26 (AP p.7).

03Where the money comes from

All revenue comes from retail jewellery sales in the Saurashtra region of Gujarat (AP p.7). The company had three stores in FY26 and opened a fourth on 19 June 2026 (AP p.3, AP p.7).

04The growth record

Source: AP p.6, AP p.7.

Our arithmetic: revenue compounded about 45.7% a year from FY24 to FY26 and profit after tax about 110.0% (AP p.6).

05What the growth is made of

Revenue grew 36.8% in FY25 and 55.3% in FY26, our arithmetic, with one store added in FY26 (AP p.6, AP p.7). The pages read do not split the growth between more grams sold and the higher gold price. Margins widened each year (AP p.7).

06Earnings quality

Growth is consuming cash: operating cash flow was negative ₹344.30 million in FY26 while profit was ₹272.01 million (AP p.6). Working capital was 99 days of revenue (AP p.7).

The income-tax inquiry bears on the quality of reported sales. After a spot verification at showrooms 1 and 2 on 13 May 2026, the tax department's intelligence and criminal investigation wing alleged that cash transactions of about ₹0.31 million, ₹2.41 million and ₹4.09 million in FY24, FY25 and FY26 should have been reported in the annual statement of financial transactions, and that some cash sales were split into several invoices below ₹0.20 million each (DRHP p.28). The document lists possible tax demands, penalties and prosecution as consequences (DRHP p.28).

07The balance sheet

Source: AP p.6, AP p.7.

Net worth rose by ₹415.72 million in FY26, more than that year's profit (AP p.6). Share capital rose from ₹50 million to ₹259.46 million, including bonus shares (AP p.6).

08What the money is for

Source: AP p.5.

09Who is selling

No one. The issue is entirely new shares (AP p.1).

10Promoters

The promoters are Manishbhai Nathubhai Ghadiya and Ghadiya Raswanti Manish (DRHP p.1). A statutory or regulatory proceeding is pending against a director, and one proceeding has been brought by the promoters (DRHP p.28).

11Who already owns it

Source: AP p.5.

The remaining 3.72% is held by about a dozen individuals, the largest with 0.33% (AP p.5, AP p.6).

12What changed just before the IPO

• Tax inquiry: spot verification in May 2026 and notices on 20 and 22 May (DRHP p.28).

• Fourth showroom: opened 19 June 2026 (AP p.3).

• Bonus shares: share capital raised to ₹259.46 million (AP p.6).

• Public company: converted from a private limited company in July 2025 (DRHP p.3).

• Bonus issue: 4 for 1 on 18 August 2025 (DRHP p.105).

• Last allotment before the IPO: a private placement of 105,250 shares at ₹760 a share in June 2025, followed by the bonus in August (DRHP p.94).

• Promoter remuneration: ₹1.80 million in FY24, ₹2.05 million in FY25 and ₹6.60 million in FY26 across the two promoters (DRHP p.80).

• Auditors: Viradiya & Associates stepped down in December 2024 and Vaghasia & Lakhani LLP was appointed in January 2025 (DRHP p.89).

13Capacity and expansion

A jeweller's capacity is stores and stock. A fifth showroom is due to open, and ₹1,600 million of the proceeds will fund inventory for existing and new stores in Saurashtra (AP p.3, AP p.5).

14Market size and industry structure

The D&B report cited in the offer document says gems and jewellery contribute about 7% of India's GDP, and describes the Saurashtra region, Rajkot, Jamnagar, Bhavnagar, Junagadh, Porbandar, Morbi, as a significant jewellery market (AP p.4).

15Competitive position

What the document claims, and what it rests on:

• A local retail presence in Saurashtra's largest cities (AP p.3).
• A wide range of styles and price points (AP p.3).

Against that: all stores in one region, all products bought from third parties, and thin margins (AP p.7).

16Peers the company named

The document gives an industry P/E range of 7.55 to 57.79, average 21.49, for its listed jewellery peers (DRHP p.135). For Arjun Jewellers it gives FY26 earnings per share of ₹10.57, net asset value per share of ₹26.57 and return on net worth of 57.18% (AP p.6). No P/E is possible for the company until a price band is set.

17Risks, in plain words

• The tax inquiry. Split invoicing of cash sales, if established, could bring demands, penalties or prosecution (DRHP p.28).
• One region. Every showroom is in Saurashtra (AP p.7).
• Suppliers. All products come from outside suppliers without long-term contracts (AP p.7).
• Cash. Operating cash flow has been negative for three years (AP p.6).

18Litigation and regulatory matters

The document's litigation summary shows a regulatory proceeding against a director and a proceeding brought by the promoters, neither quantified; the income-tax matter is described separately among the risks (DRHP p.28).

19Related-party transactions

Not read in detail for this study.

20What the offer document does not say

In the sections read for this study, the document does not give:

• The company's response to the tax department's allegations, beyond the notices.
• Revenue per store and same-store growth.
• Sales in grams, separating volume from gold price.
• Where the fifth showroom will be and what it will cost.
• The price band, lot size or issue dates, which is normal at DRHP stage.

21Five questions for management

1. What has the company told the tax department about the split cash invoices, and what exposure does it estimate?
2. How much of FY26 revenue was paid in cash?
3. Why has operating cash flow been negative in every year, and when will it turn?
4. What were same-store sales in FY26, excluding the new showroom?
5. What inventory per store does the ₹1,600 million assume?

2Sources and cited facts

This study was read from 2 documents the company filed. The 53 figures it cites are listed under the document each came from, with the page and the sentence as printed.