BlueStone Jewellery IPO subscribed 39% on Day 1, GMP signals muted listing; should you apply?

BlueStone Jewellery IPO Day 1

The initial public offering of Bluestone Jewellery and Lifestyle opened for subscription on August 11. The Rs 1,541-crore IPO has been subscribed 39 percent on Day 1.

The IPO received bids for nearly 64 lakh shares, as against the offer size of 1.65 crore shares, according to data on NSE. Retail investors booked 38 percent of their reserved portion, while Non Institutional Investors (NII) subscribed 4 percent of their reserved portion. Qualified Institutional Buyers (QIB) booked 57 percent of the portion kept for them.

BlueStone Jewellery IPO GMP:

Ahead of listing, the unlisted shares of the company were trading at Rs 526 apiece in the grey market, according to data on Investorgain. This implies a grey market premium (GMP) of nearly 2 percent from the IPO price of Rs 517 apiece. The GMP cited by the site has fallen from the 3 percent quoted by the site last week.

According to IPO Watch, the unlisted shares of the company were trading with 2.12 percent GMP in the unofficial market.

Key things to know about BlueStone Jewellery IPO:

Mumbai-based Bluestone Jewellery and Lifestyle, which offers diamond, gold, platinum and studded jewellery under its brand BlueStone, launched its IPO to raise Rs 1,541 crore through a fresh issue of shares worth Rs 820 crore, and an offer for sale of 1.39 crore shares by the existing shareholders. The IPO will remain open for public bidding between August 11 and August 13 at a price band of Rs 492-517 apiece.

Also read: Bluestone IPO delivers windfall for early backers Accel, Saama, Kalaari, Munjal

Investors can bid for a minimum of 29 shares, requiring an investment of Rs 14,993 at the upper price band, and in multiples thereafter. The allotments will likely be finalized on August 14, and the shares are scheduled to debut on BSE and NSE on August 19.

Should you apply for BlueStone Jewellery IPO?

The company has seen a sharp rise in net losses, positioning the IPO at a higher end compared with listed jewellery peers, said Harshal Dasani, Business Head at INVasset PMS. "In contrast, Titan Company, Kalyan Jewellers, Senco Gold, Thangamayil Jewellery, and PC Jeweller deliver stronger earnings profiles. Senco and smaller peers show modest profitability but still outperform BlueStone on return ratios. Listed peers trade at P/E multiples ranging from ~30× to 90×; BlueStone, yet to achieve profitability, is valued on P/S and P/B multiples that are higher than some loss-making players," he said.

"The contrast highlights BlueStone’s premium valuation against its rapid growth and omni-channel positioning, but also its elevated execution risk. Average order value growth (~22% year-on-year) and brand recognition are clear positives, yet margin discipline, inventory efficiency, and capital returns will need to improve post-listing to justify the valuation. For investors, this is a growth story priced ahead of profitability — success will depend on the speed of operational improvement in a market where incumbents already have a head start," he added.

A day before the IPO opened for public bidding, Bluestone Jewellery said that it has raised Rs 693.3 crore from 20 institutional investors via anchor book on August 8. Accel India, and Kalaari Capital Partners-backed Bluestone Jewellery in its filing to exchanges said it has finalised allocation of 1.34 crore shares to anchor investors at Rs 517 per share.

Amansa Holdings, Goldman Sachs, Societe Generale, Amundi Funds, SBI Life Insurance, Nippon Life India, Aditya Birla Sun Life AMC, HDFC Life Insurance, Mirae Asset, DSP Mutual Fund, PGIM India, Axis Mutual Fund, and Motilal Oswal AMC were investors in the anchor book.

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