Jewellery retailer Bluestone, which on Thursday filed the draft papers for an initial public offering, is expected to price the issue at a valuation of Rs 12,000-13,000 crore, a more than 50% jump from its most recent fundraising from the private market, people in the know told ET.
In August, the Bengaluru-based company closed a Rs 900 crore pre-IPO funding round that valued it at around Rs 8,100 crore, as first reported by ET.
While the IPO will see Bluestone raise Rs 1,000 crore by selling newly issued shares, sources said existing investors will sell shares worth Rs 2,000-2,100 crore, taking the size of the IPO to Rs 3,000-3,100 crore.
“The expectation, based on conversation with market experts and bankers, is to price it in this range,” a person aware of the talks said.
As per the draft red herring prospectus (DRHP), investors including Accel, Kalaari Capital and Hero group’s Sunil Kant Munjal are selling 24 million shares in the offer-for-sale portion of the IPO.
The steep valuation increase comes on the back of strong investor interest in the jewellery retail sector. Last year, Tata Group company Titan, which owns the Tanishq chain, bought out founder Mithun Sacheti’s stake in Caratlane, leading to a massive investor appetite for the sector.
Silver jewellery maker Giva recently extended its Rs 200 crore funding round by another Rs 255 crore, including a secondary share sale.
Prior to the fundraising in August, Bluestone had raised Rs 550 crore late last year from investors like Manipal group chief Ranjan Pai, Zerodha cofounder Nikhil Kamath and others, underscoring the momentum in the sector.
ET was the first to report on December 6 about Bluestone’s board approving the company’s plan to go public and raise Rs 1,000 crore through the process.
The company, which reported a 64% jump in its operating revenue for FY24, said it is planning to deploy the proceeds from its IPO towards working capital requirements.
Bluestone reported revenue of Rs 1,266 crore in FY24, while its net loss narrowed by around 15% to Rs 142.2 crore.
As per its DRHP, the company reported operating revenue of Rs 348 crore and a net loss of Rs 59 crore in the April-June period.
Selling investors
Accel and Saama Capital are among Bluestone’s earliest backers, investing as part of the company’s first institutional funding round in 2012.
While Accel holds an around 15% stake in Bluestone, Saama Capital owns close to 3%.
Through the IPO, Saama Capital and Kalaari Capital are fully exiting their holdings in Bluestone. Growth-stage investor Iron Pillar Fund is selling about a third of its holding while Munjal is divesting almost half of his holding.
Other significant investors that backed the firm in its later stages include Prosus and Peak XV Partners.
Prior to the filing of the DRHP, company founder and chief executive Gaurav Singh Kushwaha bought shares worth Rs 75 crore “for the purposes of satisfying the minimum promoter contribution requirement” for the IPO.
Kushwaha, who has been tagged as a promoter of the company, has been allotted the shares at Rs 578 apiece. According to a regulatory filing, if the IPO price is higher than the allocation price, he will pay the difference. Kushwaha now owns 17-18% of the firm.
