Lalithaa Jewellery lists at 32% premium: Should you buy?

Lalithaa Jewellery Mart made a strong debut on the stock exchanges on August 24, with its shares listing at Rs 265, a 31.84% premium over its issue price of Rs 201.The strong listing came after the jewellery retailer's Rs 1,700 crore initial public offering (IPO) received a massive response from investors. The issue was subscribed 66.63 times during the three-day bidding period from August 17 to August 19.LALITHAA JEWELLERY IPO DETAILSThe IPO was a combination of a fresh issue of 5.97 crore shares worth Rs 1,200 crore and an offer for sale (OFS) of 2.49 crore shares worth Rs 500 crore.The company fixed the final issue price at Rs 201 per share. The lot size was 74 shares, which meant retail investors needed Rs 14,874 to apply for one lot. The IPO also had a reservation of up to 3,29,670 shares for employees. These shares were offered at a discount of Rs 19 to the issue price.The allotment was finalised on August 20, while the shares were listed on both the NSE and BSE on August 24.STRONG FINANCIAL PERFORMANCE Lalithaa Jewellery Mart, which was incorporated in November 1985, has a strong presence across South India. The company mainly caters to mass-market and value-conscious customers.It sells gold, silver, diamond, precious and semi-precious jewellery, with a focus on quality, craftsmanship and original designs. It has also built a strong brand presence in Tier II and Tier III cities across southern India.The company's financial performance has also improved sharply. Its revenue increased 48% between the financial years ended March 31, 2025 and March 31, 2026. During the same period, profit after tax (PAT) jumped 177%.The strong financial performance and its regional presence were among the factors that attracted investors to the IPO.DEBT REMAINS A CONCERNWhile the company has reported strong growth, its borrowing levels remain an area investors need to watch.According to Adroit Financial Services, "The company had total outstanding borrowings of 1,238.10 crore as of June 30, 2026, secured by movable and immovable assets and personal guarantees of the Promoters. Financing agreements contain covenants restricting additional debt, dividends and changes in shareholding or management, and any breach could adversely affect the company's business, credit rating and financial condition."Adroit Financial Services also pointed out that the company's debt-to-equity ratio increased from 0.49 times in Fiscal 2024 to 0.53 times in Fiscal 2026, indicating greater reliance on borrowed funds.Despite this, the brokerage remains positive on the company's long-term prospects."It is recommended to 'Subscribe' to the IPO for long-term investment considering its growth potential and valuation," Adroit Financial Services said.VALUATION LOOKS ATTRACTIVE, SAYS BP EQUITESValuation is another factor working in favour of the stock, according to BP Equites."At the upper price band of Rs. 201, the issue is valued at 11.1x FY26 diluted EPS of Rs.18.0, compared with the listed peer average P/E of 29.7x. The valuation represents a meaningful discount to peers, this combined with the company's return ratios, regional franchise and store expansion opportunities we recommend a 'SUBSCRIBE' rating for the issue," BP Equites said.SHOULD YOU BUY, SELL OR HOLD?Lalithaa Jewellery Mart has already delivered a strong listing gain, with the stock opening at Rs 265 against the issue price of Rs 201.For investors who received shares in the IPO, the question now is whether to book profits or stay invested.Both Adroit Financial Services and BP Equites have given a 'Subscribe' recommendation, mainly citing the company's growth potential and valuation.However, the company's borrowings and rising debt-to-equity ratio remain points that investors should keep in mind.For long-term investors, the brokerage view is positive, with both Adroit Financial Services and BP Equites recommending subscription. Existing IPO allottees, meanwhile, can consider holding the stock while keeping an eye on the company's debt levels and future financial performance.(Disclaimer: The views, opinions, recommendations, and suggestions expressed by experts/brokerages in this article are their own and do not reflect the views of the India Today Group. It is advisable to consult a qualified broker or financial advisor before making any actual investment or trading choices.)- EndsPublished By: Jasmine anandPublished On: Aug 24, 2026 12:14 IST