Royal Chain Limited filed its draft papers with SEBI to raise Rs 1,000 crore through an IPO. The jewellery maker plans to use Rs 650 crore from the fresh issue to pay off debts. While the company showed a profit of Rs 371 crore in FY26, high gold price volatility remains.

Royal Chain Limited has filed its Draft Red Herring Prospectus (DRHP) with the Securities and Exchange Board of India (SEBI) to raise up to Rs 1,000 crore through an initial public offering (IPO).

The IPO comprises a fresh issue of up to Rs 850 crore and an offer for sale (OFS) of up to Rs 150 crore. Promoters Suresh Futarmal Jain, Manish Futarmal Jain, Celestial Charms and Foxy Feathers will be the selling shareholders.

JM Financial Limited and 360 ONE WAM Limited are the book-running lead managers, while MUFG Intime India Pvt Ltd is the registrar.

Royal Chain plans to use Rs 650 crore from the fresh issue towards repayment or prepayment, in part or full, of certain outstanding loan facilities and accrued interest. The remaining proceeds will be used for general corporate purposes.

Royal Chain is a vertically integrated, technology-driven original design manufacturer (ODM) of gold chains and jewellery. The company operates across the value chain, from conceptualisation and designing to prototyping and manufacturing.

It offers more than 27,000 designs across gold chains, bracelets, rings, bangles, earrings, necklaces and other categories in 14, 18 and 22 karat gold. The company primarily serves organised jewellery retailers across India through its B2B manufacturing platform.

Financial Performance

Royal Chain reported a profit of Rs 371 crore in FY26, compared with Rs 192.9 crore in FY25. Revenue from operations increased to Rs 4,732.45 crore from Rs 3,617.18 crore during the same period.

The company has an annual installed capacity of 12,000 kg. However, capacity utilisation declined to 33.37% in FY26 from 37.71% in FY25 and 64.15% in FY24.

Key Risks

The company reported negative cash flows from operating activities and investing activities in FY26, FY25 and FY24, and warned that continued negative cash flows could adversely affect its liquidity and financial condition.

Apart from high debt, gold price volatility remains another key risk for Royal Chain. The cost of materials consumed, primarily gold, stood at Rs 3,655.07 crore in FY26, accounting for 81.11% of total expenses. The corresponding figures were Rs 1,608.13 crore and 45.50% in FY25, and Rs 1,853.29 crore and 79.94% in FY24.

The company said any increase in material costs without a corresponding rise in product prices could hurt profitability, while falling gold prices could reduce the realisable value of its inventory.

Working capital requirements are another key risk. Working capital loans accounted for 72.72% of total borrowings as of March 31, 2026, up from 67.33% a year earlier and 59.15% in FY24. Royal Chain is also dependent on its Mahape manufacturing facility in Navi Mumbai, which it occupies on a long-term lease. Any disruption or termination of the lease could affect operations.

The company also faces supplier and customer concentration risks. Its top 10 suppliers accounted for 66.30% of aggregate cost of goods sold in FY26, while its top 10 customers contributed 22.32% of revenue from operations.

Royal Chain said it does not have long-term agreements with its suppliers or formal agreements with the majority of its customers.