Mumbai-based gold jewellery manufacturer Master Chains N Jewels has filed draft papers for a ₹400 crore IPO. The issue includes a fresh share sale to fund working capital and an offer-for-sale by the promoter. The company reported a 162% profit jump for the fiscal year ended March 2026.
Detailed Coverage
Master Chains N Jewels, which operates in the gold jewellery manufacturing and wholesale distribution business, has filed its draft red herring prospectus with the Securities and Exchange Board of India. The company is targeting to raise ₹400 crore through this public offering.
IPO Structure and Capital Usage
The share sale consists of a fresh issue of shares and an offer-for-sale of 59.06 lakh shares by promoter Taruna Madan Kothari. The company is also exploring a pre-IPO placement of up to ₹80 crore, which could adjust the final size of the fresh issue. A major portion of the proceeds, roughly ₹350 crore, is designated for working capital. In the jewellery industry, capital is heavily tied up in purchasing gold bullion, managing inventory across various stages of production, and covering trade receivables. By securing these funds, the company aims to support its growing operational needs and scale its wholesale business.
Financial Growth Trends
The company reported strong financial figures for the fiscal year that ended in March 2026. Profit after tax rose by 162% to reach ₹97.3 crore, compared to ₹37.1 crore in the previous year. Revenue grew at a more modest pace of 11.1%, totaling ₹1,680.6 crore in FY26 against ₹1,512.2 crore in FY25. A key point for investors to note is the significant improvement in operating margins. The EBITDA margin, which measures core operational profitability, climbed to 8.68% in FY26, up from 4.07% in the prior year. This expansion suggests better cost management or a shift in the product mix during the period.
Business Risks and Context
While profit and margins have shown sharp growth, investors should consider the inherent risks of the gold jewellery sector. The business is capital-intensive and relies heavily on gold prices, which can be volatile. Furthermore, the company’s heavy dependence on debt-funded working capital or external funding to procure raw materials means that any significant rise in interest costs or a squeeze in liquidity could impact profitability. Because the company is primarily a manufacturer and wholesaler, it may also face intense competition from both large organized players and local unorganized jewellers who often compete on price.
The next important updates to follow will be the final approval from SEBI, the announcement of the price band, and the dates for the subscription window. Investors will also monitor the company's ability to sustain its improved margin levels in subsequent quarters as it scales its operations.