- Why Titan & Kalyan Need Businesses Like Royal Chain
- The Financial Engine: Rapid Growth, High RoNW, But Tighter Margins
- What Actually Matters for the IPO?
- Author's Take: The Business Story Is Clear; Valuation Is Still the Missing Piece
Royal Chain Limited has filed its DRHP for a ₹1,000 crore IPO, comprising a ₹850 crore fresh issue and ₹150 crore OFS. But this is not a typical jewellery IPO.
Royal Chain is an integrated Original Design Manufacturer (ODM) that designs and manufactures jewellery for other jewellery businesses. In FY26, it served 1,887 customers, including Titan Company, Kalyan Jewellers, P N Gadgil Jewellers and Senco Gold.
So, while consumers see the jewellery brands, Royal Chain operates behind the scenes. The bigger question is whether this B2B manufacturing model can turn its scale and customer relationships into sustainable growth.
Why Titan & Kalyan Need Businesses Like Royal Chain
India's organised jewellery chains have been expanding rapidly. Between March 2023 and March 2026, Titan, Kalyan, Senco, and P N Gadgil opened more than 1,000 stores globally.
Every new store needs products. But building and constantly upgrading an in-house manufacturing setup for thousands of designs requires capital, technology and skilled manpower. This creates an opportunity for specialised B2B manufacturers such as Royal Chain.
Royal Chain operates a vertically integrated manufacturing facility in Mahape, Navi Mumbai, with an annual installed capacity of 12,000 kg of jewellery. It also has a catalogue of 27,000+ active designs, supported by an in-house design team.
This means Royal Chain is not just a manufacturer. It combines scale, design and technology to supply a wide range of jewellery to large organised retailers.
The scale of this institutional business is also growing. Revenue from institutional customers increased from ₹131.03 crore in FY24 to ₹322.99 crore in FY26, a 57.02% CAGR.
The Financial Engine: Rapid Growth, High RoNW, But Tighter Margins
Royal Chain's financials show strong growth over the last two years.
Revenue from operations increased from ₹2,350.58 crore in FY24 to ₹4,732.45 crore in FY26, a 41.89% CAGR. Net profit rose from ₹27.36 crore to ₹173.34 crore, a 151.70% CAGR.
Profitability also improved. Gross margin increased from 4.62% in FY24 to 7.84% in FY26, while EBITDA margin rose from 2.71% to 6.09%.
However, the business needs to be viewed differently from a consumer jewellery retailer. A B2B jewellery manufacturer handles a large value of gold, so revenue can be very high even when the percentage margin is relatively small.
Royal Chain's FY26 revenue of ₹4,732.45 crore was below Sky Gold & Diamonds' ₹6,294.89 crore, but more than twice the revenue of Shringar House of Mangalsutra at ₹2,245.82 crore and Shanti Gold International at ₹2,018.71 crore.
On profitability, however, Royal Chain did not lead the peer group. Its FY26 EBITDA margin was 6.09%, compared with 6.90% for Sky Gold, 7.27% for Shringar and 9.86% for Shanti Gold.
The standout number was Return on Net Worth (RoNW). Royal Chain reported 53.34% in FY26, compared with 23.00% for Sky Gold, 26.29% for Shringar and 38.08% for Shanti Gold.
So the financial picture is not simply a story of being bigger or more profitable than peers. Royal Chain combines large-scale, rapid profit growth, and high RoNW, but its margins remain below those of the three listed peers disclosed in the DRHP.
What Actually Matters for the IPO?
The first thing investors need to examine is what Royal Chain plans to do with the fresh IPO money.
Of the ₹850 crore fresh issue, ₹650 crore is earmarked for repayment or prepayment of borrowings. As of August 31, 2026, the company had total outstanding borrowings of ₹848.73 crore and incurred finance costs of ₹37.82 crore in FY26.
Repaying debt should reduce future interest costs and improve profits.
There is another important number: capacity utilisation was 33.37% in FY26 after the company's manufacturing facilities were consolidated at Mahape.
This means the company has substantial installed capacity that is currently not being used. If customer demand continues to grow, Royal Chain may be able to increase production without immediately making a comparable investment in new manufacturing capacity.
Taken together, lower debt and available manufacturing capacity give Royal Chain two potential levers for future earnings growth. The key business question is whether it can use these advantages to convert its customer relationships and manufacturing scale into sustained growth in profits and cash flow.
But that is only half of the IPO equation.
The other question is what investors will have to pay for that growth.
As of September 25, 2026, the DRHP showed P/E multiples of 43.96x for Sky Gold, 15.72x for Shringar House of Mangalsutra and 15.34x for Shanti Gold, giving a peer-group average of about 25.01x.
Royal Chain's IPO P/E cannot yet be calculated because the price band has not been announced. Once it is available, the implied P/E will show how much of Royal Chain's future growth and earnings potential is already reflected in the IPO valuation.
Author's Take: The Business Story Is Clear; Valuation Is Still the Missing Piece
Royal Chain's IPO story is different from a typical jewellery retailer. Its strength lies in its manufacturing capacity, design capabilities, technology and relationships with organised jewellery retailers.
The numbers support this story: revenue grew at a 41.89% CAGR between FY24 and FY26, net profit grew much faster, and its 53.34% RoNW stands out against the listed peers.
However, Royal Chain's FY26 EBITDA and PAT margins were lower than all three peers, while the business also carries significant borrowings, although a large part of the fresh issue is earmarked for debt repayment.
This makes valuation the biggest unanswered question at the DRHP stage. Once the price band is announced, the implied P/E will show how much of Royal Chain's future growth is already reflected in the IPO valuation.
Ultimately, investors need to look beyond the scale of Royal Chain's B2B engine and ask what price they are being asked to pay for it.