Shanti Gold International IPO

More About Shanti Gold International Limited

Shanti Gold International Limited is a leading manufacturer of high-quality 22kt CZ casting gold jewellery, recognized for its installed production capacity. The company specializes in designing and producing:

• Bangles

• Rings

• Necklaces

• Complete jewellery sets

These designs cater to various price points, ranging from wedding jewellery to festive and daily-wear collections.

Manufacturing Capabilities

Shanti Gold operates a fully integrated in-house manufacturing facility to ensure quality control across:

• Design

• Manufacturing

• Packaging

A significant portion of the stone-setting process is manually handled by skilled artisans. The manufacturing facility, located in Andheri East, Mumbai, spans 13,448.86 square feet with an installed production capacity of 2,700 kg per annum.

Customer Network and Market Presence

Shanti Gold serves an extensive clientele, utilizing CAD technology to develop over 400 new designs per month. As of November 15, 2024, the company employed 80 CAD designers.

Customer Base and Revenue Growth

• Served 332 customers in the six-month period ending September 30, 2024.

• Customer base grew from 271 (Fiscal 2022) to 379 (Fiscal 2023).

• Achieved a CAGR of 28.88%.

Key Clients

Shanti Gold has established strong relationships with renowned jewellery brands, including:

• Joyalukkas India Limited

• Lalithaa Jewellery Mart Limited

• Alukkas Enterprises Private Limited

• Vysyaraju Jewellers Private Limited

• Shree Kalptaru Jewellers (I) Private Limited

The company serves 13 states and one union territory in India, along with four international markets.

Market Reach and Expansion Plans

• Established presence in Mumbai, Bangalore, Chennai, Hyderabad, and branches in Tamil Nadu, Andhra Pradesh, Karnataka, Telangana, Gujarat, and Madhya Pradesh.

• Plans to expand into Jaipur with a new manufacturing facility.

• South India is a key market due to its deep cultural affinity for gold jewellery.

Revenue Distribution by Region

South India (Major Market Share)

• Tamil Nadu: ₹2,786.39 million (Fiscal 2024) (39.17% of revenue)

• Andhra Pradesh: ₹966.45 million (Fiscal 2024) (13.58% of revenue)

• Karnataka: ₹1,046.61 million (Fiscal 2024) (14.71% of revenue)

• Telangana: ₹778.77 million (Fiscal 2024) (10.95% of revenue)

• Kerala: ₹105.22 million (Fiscal 2024) (1.48% of revenue)

Rest of India

• ₹1,128.86 million (Fiscal 2024) (15.87% of revenue)

International Markets

• UAE: ₹208.79 million (Fiscal 2024)

• Singapore: ₹81.98 million (Fiscal 2024)

• Qatar: ₹11.27 million (Fiscal 2024)

• USA: Nil (Fiscal 2024)

Leadership and Vision

• Promoters & Directors: Pankajkumar H. Jagawat and Manojkumar N. Jain.

• Commitment to craftsmanship, innovation, and growth in the jewellery industry.

• Expansion efforts focus on capturing market opportunities in the growing jewellery sector.

Recognitions and Accreditations

Shanti Gold International Limited has received several accolades for its brand, including:

• Recognition by the Gem and Jewellery Export Promotion Council for the year 2023-24.

• Preferred Manufacturer of India (PMI 5) Award by the Gem and Jewellery Domestic Council in 2019-20.

• All gold jewellery products are hallmarked by the Bureau of Indian Standards (BIS).

Industry Outlook

In CY24, the Indian jewellery market is projected to grow by 13.1% year-on-year, reaching ₹4,653 billion. Additionally, the market is expected to expand at a compounded annual growth rate (CAGR) of 9.7% between CY23 and CY29, reaching ₹7,162 billion.

The increasing demand for gold jewellery in India is primarily driven by the expanding middle class and rising disposable incomes. As more individuals experience financial growth, they are increasingly able to afford luxury items like gold jewellery.

For many in this segment, gold jewellery serves as a status symbol, representing an enhanced lifestyle and a valuable investment. This trend is particularly strong in urban areas, where economic growth has boosted financial independence and purchasing power.

How Will Shanti Gold International Limited Benefit

• Market Growth Alignment: With the Indian jewellery market expected to grow at a 9.7% CAGR, Shanti Gold International Limited is well-positioned to capitalize on rising demand by expanding its product offerings and market reach.

• Expanding Middle-Class Demand: The increasing disposable income of India’s middle class enhances demand for gold jewellery. Shanti Gold, with its diverse product range, can cater to this growing customer segment effectively.

• Strong Manufacturing Capabilities: Shanti Gold’s in-house manufacturing facility ensures high-quality production. With a 2,700 kg annual capacity and skilled artisans, the company maintains precision in design, stone setting, and craftsmanship.

• Widespread Market Presence: Operating across 13 states and four international markets, Shanti Gold leverages its established presence to expand further, tapping into new opportunities in Jaipur and beyond.

• Robust Customer Network: With a rapidly growing customer base and strong ties to leading jewellery brands, Shanti Gold benefits from sustained business relationships and consistent revenue growth.

• Strategic Expansion in South India: South India accounts for a major share of Shanti Gold’s revenue. Strengthening distribution and manufacturing in this region enhances accessibility and market dominance.

Peer Group Comparison

Company Name	Face Value (₹)	Revenue (₹ million)	Earnings per Share (₹)	NAV (₹)	Price / Earnings Ratio	RoNW (%)
Shanti Gold International Limited	10	7,114.34	4.98	17.90	[●]	32.28
Peer Group
Utssav CZ Gold Limited	10	3,401.96	7.65	20.96	37	44.62
RBZ Jewellers Limited	10	3,274.29	5.39	51.87	39	14.38
Sky Gold Limited	10	17,454.84	35.18	212.15	168	23.66

Key Insights

• Face Value: All companies have a uniform face value of ₹10 per share. This standardization makes direct comparisons easier and ensures fairness in valuation across the industry.

• Revenue: Sky Gold Limited leads with ₹17,454.84 million, followed by Shanti Gold at ₹7,114.34 million. Shanti Gold’s revenue is significantly higher than Utssav CZ Gold and RBZ Jewellers, showing steady market traction.

• Earnings Per Share: Sky Gold has the highest EPS at ₹35.18, reflecting strong profitability. Utssav CZ Gold (₹7.65) and RBZ Jewellers (₹5.39) surpass Shanti Gold’s ₹4.98, indicating scope for improving earnings efficiency.

• Net Asset Value: Sky Gold has the highest NAV at ₹212.15, showing strong asset backing. RBZ Jewellers follows at ₹51.87, while Shanti Gold’s NAV of ₹17.90 suggests potential for strengthening financial reserves.

• Price / Earnings Ratio: Sky Gold has the highest P/E ratio at 168, indicating strong investor confidence. Utssav CZ Gold (37) and RBZ Jewellers (39) remain competitive, while Shanti Gold’s figure is undisclosed, requiring further assessment.

• Return on Net Worth (RoNW %): Utssav CZ Gold leads with 44.62% RoNW, showing superior profitability. Shanti Gold (32.28%) performs better than RBZ Jewellers (14.38%) but lags behind Sky Gold (23.66%) in terms of investor returns.

Shanti Gold International Limited IPO Strengths

• Extensive Jewellery Collection Designed by Experts

The company specialises in designing and producing 22 Kt CZ gold jewellery, offering a diverse range of intricately crafted pieces, including bangles, rings, and necklaces. With 80 CAD designers creating over 400 designs monthly, it continuously innovates to meet client preferences across markets.

• Integrated In-House Manufacturing for Quality Control

Operating a fully integrated manufacturing setup, the company ensures complete quality control from design to packaging. Its Andheri facility, spanning 13,448.86 square feet, has an annual capacity of 2,700 kg, allowing precise, high-quality jewellery production while reducing reliance on external vendors.

• Experienced Leadership Driving Business Growth

With over 20 years of industry experience, the company’s promoters leverage their expertise and connections to expand operations. Their leadership has strengthened relationships with key stakeholders, positioning the company for sustained growth while navigating market challenges effectively.

• Stable Financial Performance and Growth

The company’s financial stability is reflected in its consistent revenue growth and profitability. Key metrics, including EBITDA margins and return on net worth, highlight its strong financial performance over the past fiscal years, ensuring resilience and long-term sustainability.

• Established Relationships with Corporate and Jewellery Businesses

Strong, long-term relationships with corporate clients and jewellery businesses across 13 Indian states and four international markets enable the company to cater to diverse consumer needs. These strategic partnerships have contributed to its growing market presence and reputation within the industry.

Key Strategies for Shanti Gold International Limited

• Capturing Market Opportunities in the Jewellery Industry

In CY23, India’s gold jewellery market was valued at ₹4,115 billion, with a 31.5% CAGR from CY20 to CY23. Despite a 2% volume decline, gold prices increased by 7%. The market is projected to reach ₹7,162 billion by CY29.

• Manufacturing Expansion and Jaipur Facility

The company operates with an annual manufacturing capacity of 2,700 kg, producing 775.54 kg by September 2024. A new Jaipur facility, adding 1,200 kg capacity, is planned with advanced machinery. Necessary approvals are being secured to ensure regulatory compliance and smooth operations.

• Introduction of Machine-Made Gold Jewellery

A new line of machine-made plain gold jewellery is being introduced at the Jaipur facility, catering to 85% of India’s bridal jewellery demand. Marketing efforts are underway, securing three Letters of Intent (LOIs) from potential buyers to expand product offerings.

• Leveraging Market Growth and Client Expansion

The company aims to capitalize on industry growth by strengthening supplier networks and client relationships. Expansion into corporate clientele is a strategic focus, aligning product offerings with market trends while participating in exhibitions to enhance partnerships and customer engagement.

• Expanding Presence in North India

North India’s gold jewellery trends favour lightweight, modern designs. The company’s revenue from Punjab, Haryana, and Rajasthan demonstrates its foothold, with plans to scale operations in these states and further strengthen its regional market position.

• Strengthening Global Market Presence

The global jewellery market, valued at USD 235–245 billion in CY23, is expected to reach USD 257 billion by 2028. Expansion into the USA and UAE through trade exhibitions will enhance brand visibility, fostering partnerships with international distributors and retailers.

• Enhancing Working Capital for Business Growth

Domestic gold demand rose to 289 tonnes in H1CY24 from 281 tonnes in H1CY23. To scale operations and meet increasing demand, the company plans to enhance working capital for raw material procurement, ensuring sustainable business growth and market competitiveness.