BlueStone IPO: Late-stage investors Prosus, Peak XV stare at paper loss; early backers Accel, Kalaari Capital, others exit handsomely

BlueStone IPO: early backers Prosus, Info Edge holdings soar on paper; Accel, Kalaari Capital, others exit handsomely

From Accel’s multi-bagger exits to Info Edge’s modest gains, BlueStone’s initial public offering (IPO) has delivered a mixed bag for investors — rewarding early entrants with hefty cash returns while leaving later backers from the 2024 funding round facing paper losses.

While funds such as Accel, Kalaari Capital, and Iron Pillar capitalised on the market debut to partially and fully exit with multi-bagger returns, investors from its most recent funding round — including Peak XV Partners, Prosus, Steadview Capital, and Think Investments — are holding stakes that are currently valued below their entry price.

According to shareholding data from market intelligence platform Tracxn, Prosus currently owns over 4 percent of BlueStone. Based on the jeweller’s market capitalisation of Rs 8,262 crore as of August 19’s close, that stake is worth roughly Rs 355 crore.

Info Edge Ventures’ 2-3 percent holding comes to around Rs 198 crore, while London-based Steadview’s less than one percent stake is valued at nearly Rs 81 crore. Meanwhile, San Francisco-headquartered Think Investments’ over one percent translates into close to Rs 85 crore.

The markdown stems from the rounds in which these investors participated. Peak XV Partners, Prosus, Steadview, and Think Investments had backed BlueStone’s Rs 900-crore funding round in August 2024 at a valuation of around Rs 8,200 crore — higher than the roughly Rs 7,800 crore at which the IPO opened. In contrast, Info Edge Ventures, which invested in Bluestone’s Rs 550-crore round in late 2023, holds stakes that are slightly up from their entry price.

To be sure, these are paper losses as on August 19 close and it is possible that these bets turn profitable for the later-stage investors once the share price goes up and the company's market capitalisation increases past its previous valuation during the private market fundraise.

The paper losses, however, sit alongside the sizeable realised returns of early investors. BlueStone Jewellery’s Rs 1,541 crore IPO, which opened on August 19, saw shares close at Rs 546 on the BSE — 7.3 percent above the issue price — turning into a windfall for backers who had entered at a fraction of today’s value.

Early backers cash out

Accel India, which invested through its Accel India III (Mauritius) fund at a weighted average cost of Rs 57.94 per share, sold 30.3 lakh shares. That translated into a 9.4x return multiple and about Rs 165 crore in proceeds.

Saama Capital emerged as the biggest winner on a relative basis. Having entered at just Rs 48.70 per share, it bagged an 11.2x return, pocketing nearly Rs 224 crore from the sale of 41 lakh shares.

Kalaari Capital booked exits from two of its vehicles. From Kalaari Capital Partners II, it had entered at Rs 59.28 per share; its 70.7 lakh shares fetched about Rs 386 crore, at a 9.4x return. Its Opportunity Fund tranche, acquired at Rs 82.41 per share, delivered a more modest 6.6x return, yielding Rs 49 crore from 9 lakh shares.

Later-stage backer Iron Pillar logged relatively smaller gains. Its Fund I investment, at an entry price of Rs 92.81 per share, yielded a 5.9x return and about Rs 60 crore in proceeds. A second tranche, via Iron Pillar India Fund I at Rs 82.41 per share, delivered a 6.6x return worth Rs 36 crore.

Hero Enterprise Partner Ventures, led by Sunil Kant Munjal and partners, had entered at a significantly higher Rs 262.76 per share. Even so, the fund sold 40 lakh shares in the IPO, securing a 2x return and proceeds of about Rs 18 crore.

Polished for the future

The IPO comprised both a fresh issue and an offer-for-sale. Proceeds from the fresh issue will be used to meet working capital needs and general corporate purposes.

Founded in 2011, BlueStone sells diamond, gold, platinum and studded jewellery under its flagship brand, spanning 275 stores across 117 cities. It also operates three manufacturing facilities in Mumbai, Jaipur, and Surat.

Financially, the jeweller has narrowed its red ink while ramping up sales. For FY24, revenue surged 64 percent to Rs 1,265.8 crore, while net loss shrank to Rs 142.2 crore from Rs 167.2 crore in the previous year.

For investors, BlueStone’s listing has been nothing short of a payday with polish — proving that in India’s consumer internet space, patience can sometimes pay off in carats, not just in cash.