Master Chains N Jewels Limited IPO

01At a glance

What the company does: designs and makes gold jewellery in 14, 18 and 22 carat, chains, earrings, bracelets, necklaces, rings, mangalsutras and lightweight daily wear, and also does job work (AP p.3).

Who pays it: single-store and multi-store retail jewellers, mainly in Maharashtra, Karnataka, Telangana, Gujarat and Punjab (AP p.3). The top five customers were 18.91% of FY26 gross revenue (AP p.4).

Why it is raising money: ₹3,500 million for working capital and the rest for general purposes (AP p.6).

How fast it has grown: revenue from ₹12,726 million in FY24 to ₹16,806 million in FY26, and profit from ₹220 million to ₹973 million (AP p.7).

The one thing to understand: a wholesaler whose margin nearly tripled in one year. EBITDA margin went from 3.17% in FY24 and 4.08% in FY25 to 8.68% in FY26, while operating cash flow turned to an outflow of ₹736.54 million (AP p.7, AP p.8). The pages read do not explain the jump.

02The business, in plain words

A jewellery wholesaler buys gold, has its craftsmen turn it into jewellery, and supplies retail jewellers who put it on display. It earns a making charge and a small margin over the gold content. Because the gold itself is most of the value, the business needs large working capital, and swings in the gold price change both its stock values and its customers' demand.

A jeweller's shop needs a fresh range of gold chains → it orders from Master Chains → the company buys gold and its in-house karigars make the pieces → it delivers and is paid for the gold plus the making charge.

The company has manufacturing units and relies on in-house karigars (DRHP p.38, DRHP p.44). It incurs gold loss during manufacture, which it must recover (DRHP p.52).

Earnings equation: Profit ≈ grams sold × (making charge + metal margin) − gold loss − overheads − interest.

03Where the money comes from

Source: AP p.4, DRHP p.30.

The company says it is oriented to wholesale distribution to retail jewellers (AP p.3). Its top ten suppliers provided ₹10,199.58 million of purchases in FY26 (DRHP p.34).

04The growth record

Source: AP p.7, AP p.8.

05What the growth is made of

Revenue grew 11.1% in FY26, but EBITDA grew 137% (AP p.7, our arithmetic). The pages read do not explain the margin jump. The document says profitability depends on gold price and availability, and lists volatility in gold prices as a risk (DRHP p.36). It is also growing its lightweight jewellery range (DRHP p.47).

06Earnings quality

Profit and cash moved in opposite directions in FY26: profit ₹972.72 million, operating cash flow negative ₹736.54 million (AP p.7). The company has had negative cash flows before and describes the business as working-capital intensive (DRHP p.37, DRHP p.40). Contingent liabilities and customer credit risk are among its listed risks (DRHP p.41, DRHP p.42).

07The balance sheet

Source: AP p.7, AP p.8.

Borrowings nearly doubled in FY26 to fund working capital (AP p.7). Return on capital employed was 42.30% in FY24, 50.54% in FY25 and 77.09% in FY26; debtor days were 10, 13 and 33 and inventory days 42, 43 and 45 (DRHP p.140). Bad debts written off were ₹27.68 million in FY26 (DRHP p.42).

08What the money is for

Source: AP p.6.

A pre-IPO placement of up to ₹800 million may reduce the fresh issue (AP p.6).

09Who is selling

Source: AP p.1.

10Promoters

The promoters are Madan Sardarmal Kothari, chairman and whole-time director, with over 29 years in jewellery manufacturing; Raj Madan Kothari, managing director and chief executive; Khushbu Raj Kothari; and Taruna Madan Kothari (AP p.5). The document notes that certain immediate relatives of the promoters are treated as promoter group under the regulations, and lists a related risk (DRHP p.43).

11Who already owns it

The Kothari family holds the company (AP p.5). Share capital is ₹45 million; a 20-for-1 bonus issue was approved in June 2026 (AP p.7). Before the offer, Madan Sardarmal Kothari holds 49.24%, Raj Madan Kothari 33.33% and Taruna Madan Kothari 16.53% (DRHP p.121).

12What changed just before the IPO

• Margins: EBITDA margin more than doubled in FY26 (AP p.8).
• Bonus issue: 20 shares for every one, approved on 5 and 8 June 2026 (AP p.7).
• Borrowings: up from ₹1,137 million to ₹2,142 million (AP p.7).
• Bonus allotment: 90,000,000 bonus shares in the ratio 20:1 were allotted on 7 July 2026, the last allotment before the offer, at nil consideration (DRHP p.321).
• Auditor: CGCA & Associates LLP was appointed statutory auditor in November 2025, for five consecutive years (DRHP p.94).
• Company form: the company became a public limited company in November 2025 (DRHP p.3).

13Capacity and expansion

The company runs its own manufacturing units with in-house craftsmen (DRHP p.44, DRHP p.50). The proceeds fund working capital rather than new capacity (AP p.6).

14Market size and industry structure

The CARE report cited in the offer document says gems and jewellery contribute about 7% of India's GDP and about 15% of merchandise exports, and that gold made up 80% of the Indian jewellery market in 2025 (AP p.4, AP p.5). The wholesale jewellery market includes organised and unorganised competitors (DRHP p.46).

15Competitive position

What the document claims, and what it rests on:

• Long relationships with retail jewellers in western and southern India (AP p.3).
• In-house design and manufacturing with customisation (AP p.3).
• A spread customer base: the top five under 20% of revenue (AP p.4).

Against that: thin margins historically, dependence on gold prices, and working-capital needs (AP p.8, DRHP p.36, DRHP p.37).

16Peers the company named

The peer comparison was not read in detail for this study. For Master Chains the document gives FY26 earnings per share of ₹10.29, net asset value per share of ₹24.55 and return on net worth of 41.93% (AP p.7). No P/E is possible for the company until a price band is set.

17Risks, in plain words

• Gold price. Swings change inventory values and demand (DRHP p.36).
• Working capital. Negative operating cash flow in FY26; borrowings doubled (AP p.7, DRHP p.37).
• Suppliers. Ten suppliers provide most purchases (DRHP p.34).
• Gold loss and misconduct. Manufacturing loss and employee fraud risks (DRHP p.33, DRHP p.52).
• Seasonality. Demand peaks around festivals and weddings (DRHP p.42).

18Litigation and regulatory matters

The litigation summary was not read in detail for this study.

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:

• What drove the FY26 margin jump, and how much came from gold-price gains on inventory.
• Grams sold, separating volume from price.
• How gold is hedged, if at all.
• Why operating cash flow turned negative by ₹736.54 million.
• The price band, lot size or issue dates, which is normal at DRHP stage.

21Five questions for management

1. How much of FY26 EBITDA came from the rise in gold prices on inventory held?
2. Does the company hedge its gold inventory, and how?
3. How many kilograms of gold jewellery were sold in each year?
4. Why did working capital absorb so much cash in FY26?
5. What gold-loss rate does the company run at, and how is it recovered from customers?

2Sources and cited facts

This study was read from 2 documents the company filed. The 57 figures it cites are listed under the document each came from, with the page and the sentence as printed.