Bluestone Jewel

Second largest digital-first jewellery brands in India in terms of revenues in Fiscal 2024 offering an omnichannel retail experience across website, mobile application and stores;

In-house technology architecture driving end-to-end business operations from design, online rendering, merchandizing, manufacturing and retail.

Differentiated approach to product and design catering to women, men and couples between the ages of 25 to 45 with an extensive range and variety of products.

Advanced manufacturing capabilities across three facilities with vertically integrated operations covering raw material procurement, design, production and marketing and sales.

Pan-India presence across tier-I, tier-II and tier-III cities operating through a combination of Company Stores and Franchisee stores with healthy unit economics.

Founder-led company supported by an experienced and professional management team and backed by renowned investors.

The company has not generated any profits since inception. The company has experienced loss of Rs. 2,218.37 million, Rs. 1,422.36 million and Rs. 1,672.44 million in Fiscal 2025, 2024 and 2023, respectively and had negative total equity of Rs. 718.26 million in Fiscal 2023. Any loss or negative total equity in future periods could adversely affect its operations, financial conditions, and the trading price of the company Equity Shares.

There have been certain instances of non-compliances, including with respect to certain secretarial/ regulatory filings for corporate actions taken by the Company in the past. Consequently, its may be subject to regulatory actions and penalties for any such non-compliance and the company business, financial condition and reputation may be adversely affected.

Its Repeat Revenue Ratio (defined as revenue generated by sales to repeat customers, i.e., customers who place an order more than once at any time previously) was 44.61%, 39.83% and 34.67% in Fiscal 2025, 2024 and 2023, respectively. If the company fails to convert existing customers into repeat customers or acquire new customers or fails to do so in a cost-effective manner, its may not be able to increase revenue or maintain profitability. Further, if the company fails maintain Average Order Value levels, which was Rs. 47,671.26, Rs. 41,204.71 and Rs. 32,038.38 in Fiscal 2025, 2024 and 2023, respectively, its may not be able to sustain the company revenue base and margins, which would have a material adverse effect on its business and results of operations.

The company purchase and manufacture inventory in anticipation of sales. Its inventory was Rs. 16,525.47 million, Rs. 9,912.21 million and Rs. 3,953.17 million as of March 31, 2025, 2024 and 2023, respectively. If the company fails to manage its inventory effectively, the company business and results of operations could be adversely affected.

Its Promoter, Gaurav Singh Kushwaha, has pledged certain of his Equity Shares with certain lenders. Any exercise of such pledge by the lender could dilute his shareholding, which may adversely affect its business and future prospectus.

The company has witnessed negative cash flows used in operating activities in Fiscal 2025 and 2024 amounting to Rs. 6,658.28 million and Rs. 1,811.64 million, respectively. Any negative cash flows in the future would adversely affect its cash flow requirements, which may adversely affect the company ability to operate its business and the company financial condition.

The Company will not receive any proceeds from the Offer for Sale.

Its Statutory Auditors have included certain emphasis of matters in their examination report.

The seasonality of its business affects the company quarterly results and places an increased strain on its operations.

Under-utilization of its existing manufacturing facilities and an inability to effectively utilize the company manufacturing capacities could have an adverse effect on its business, future prospects, and future financial performance.

The company is dependent on third-party transportation providers for the delivery of raw materials and its products.

The company is subject to payment-related risks, including risks associated with cash on delivery and payment processing risks. In the event we are unable to adequately address such risks its business, results of operation and financial condition may be adversely impacted.

If the company is unable to provide an efficient omni-channel experience to its customers and facilitate their transition away from an offline-only experience, its growth may be impacted, which could adversely impact the company brand value, results from operation, and cash flows.

The Company has received complaints and clarification and request for clarifications after filing of the Draft Red Herring Prospectus alleging, among others, factual errors, omission of material facts and clarifications on disclosures. The company has also been made party to an appeal before the Securities Appellate Tribunal, Mumbai. The company cannot assure you that its will not receive similar complaints or not be made a party to litigations in the future.

The company has received certain summons and requests for personal appearances from the Directorate of Enforcement ("ED") in relation to certain investments received by the Company.

Increase in material costs without a corresponding increase in its product prices could have an adverse impact on the company profitability thereby impacting its results of operations and financial condition.

There have been delays in payment of statutory dues by the Company in Fiscal 2024 and delay in repayment of loans during Fiscals 2024 and 2023. Inability to make timely payment of its statutory dues could result it into paying interest on the delay in payment of statutory dues which could adversely affect the company business, its results of operations and financial condition.

The company has in the past entered into related party transactions and may continue to do so in the future, which may potentially involve conflicts of interest with the equity shareholders.

Its may be subject to fraud, theft, employee negligence or similar incidents.

Its may not continue to grow in line with historical rates and may face difficulties in executing the company expansion plans and implementing its growth strategies which could have an adverse impact on the company results of operations, financial condition and cash flows.

The cost of gold bullion, diamonds and other precious and semi-precious stones accounted for 101.74%, 109.36% and 104.98% of its cost of materials consumed in Fiscal 2025, 2024 and 2023, respectively. The non-availability or fluctuation in prices of raw materials may have an adverse effect on its business, results of operations, cash flows and financial condition.

As of March 31, 2025, 2024 and 2023, the company had 184, 207 and 170 suppliers for its raw materials, respectively. Interruptions in the supply of raw materials could adversely affect the company business, financial condition, results of operations and cash flows.

The company has incurred loss for the year of Rs. 2,218.37 million, Rs. 1,422.36 million and Rs. 1,672.44 million in Fiscal 2025, 2024 and 2023, respectively. Its total borrowings have fluctuated from Rs. 2,284.18 million, as of March 31, 2023 to Rs. 4,304.26 million, as of March 31, 2024 and to Rs. 7,286.18 million, as of March 31, 2025. Significant variations in its losses and borrowings could have an adverse impact on the company business, financial condition and results of operations.

The company has experienced increase in its revenue from operations from Rs. 7,707.26 million in Fiscal 2023 to Rs.12,658.39 million in Fiscal 2024 and to Rs. 17,700.02 million in Fiscal 2025. Its inability to continue to maintain an increase in the company revenues in future periods could have an adverse impact on its business, financial condition and results of operations.

The company has incurred indebtedness, and an inability to comply with repayment and other covenants in its financing agreements could adversely affect the company business and financial condition.

Its ability to access capital at attractive costs depends on the company credit ratings. Non-availability of credit ratings or a poor rating may restrict its access to capital and thereby adversely affect the company business, financial conditions, cash flows and results of operations.

The company depends on third parties to certify its jewellery products. Fraudulent or invalid certification or negative publicity surrounding such third parties may impact the credibility of its products which could adversely affect its business, the company results of operations and financial condition.

If the company is unable to provide new designs or update its collections in accordance with customer preference, it may adversely affect the company business prospects, results of operations and cash flows.

The company collect money from customers pursuant to the Monthly Installment Plan scheme operated by the Company. Refunds to customers of amounts collected pursuant to such scheme or suspension of payments by customers could have an adverse impact on its results of operations, financial condition and cash flows.

Blue Credits offered by us under the Old Gold Exchange Scheme represent a claim on the Company for future purchases by the holders of such credits. The company is liable to offer customers credits against purchases of its products which may result in a loss of revenues for the Company.

The company generated a substantial portion of its sales directly from physical sales which are not generated online and any adverse developments affecting the company operations in these regions could have an adverse impact on its revenue and results of operations.

The company operates in highly competitive markets and an inability to compete effectively may adversely affect its business, results of operations, cash flows and financial condition.

Its jewellery manufacturing processes involve the use of various hazardous materials and chemicals, which pose environmental and health risks. Any adverse incidents relating to the use of such hazardous materials and chemicals could have an adverse impact on its business, financial condition and results of operations.

The strength of its flagship brand "BlueStone" and the company reputation is crucial to its success. The company advertising and marketing costs as a percentage of its total expense was 7.76%, 8.59% and 8.81% in Fiscal 2025, 2024 and 2023, respectively. Its may not be successful in maintaining and enhancing awareness of the "BlueStone" brand which may reduce its revenues and may adversely impact the company business, financial condition, results of operations, cash flows and prospects.

There are outstanding litigation proceedings against the Company, Promoter and Directors. Any adverse outcome in such proceedings may have an adverse impact on its reputation, business, financial condition, results of operations and cash flows.

The company has accumulated losses amounting to Rs. 24,583.31 million as of March 31, 2025. An increase in its accumulated losses over extended periods could have an adverse impact on its results of operations, financial condition and cash flows.

There have been delays in repayment of loans during Fiscal 2024 and 2023. Inability to make timely repayment of its loans could result it into paying interest on the delay amounts or such facilities being recalled which could adversely affect its business, the company results of operations and financial condition.

The Company requires significant amounts of working capital for continued growth. Its working capital loans accounted for 19.61%, 16.26% and 45.49% of the company total borrowings as of March 31, 2025, 2024 and 2023, respectively. Its inability to meet the company working capital requirements, on commercially acceptable terms, may have an adverse impact on its business, financial condition and results of operations.

Volatility in the market price of gold and diamonds has affects the demand for its products and may affect the company inventory value, profitability and scale of operations.

Its business depends on the company ability to maintain and scale its technology infrastructure. In Fiscal 2025, 2024 and 2023, the company witnessed 298.87 million, 165.97 million and 81.86 million unique online sessions (defined as the number of times a user visits its website or mobile application), respectively, on the company website and mobile application. Any interruptions or delays in service on its mobile applications or websites or any undetected errors or design faults could result in limited capacity, reduced demand, processing delays, and loss of customers.

The growing prevalence and popularity of lab-grown diamonds could have an adverse impact on its business, financial condition and results of operations.

Defects, errors, or vulnerabilities in its website, applications, backend systems or other technology systems could impair the delivery of the company platform and services, and its reputation, business, financial condition, cash flows and results of operations could be materially and adversely affected.

If the company is unable to continue to innovate with regard to its online platform as part of the company omni-channel approach or features or if the company fails to adapt to changes in terms of technology, its business, financial condition, cash flows and results of operations would be adversely affected.

Measures that the company is taking to improve the trust and safety of its platform and the company physical stores, may cause it to incur significant expenditure and may not be successful which could adversely affect its business, financial condition, results of operations and cash flow.

Its inability to adequately address customer grievances could have an adverse impact on the company reputation, business prospectus and results of operations.

As of March 31, 2025, the company operated 275 stores in 117 cities, including Franchise Stores, across 26 States and Union Territories in India. If the company is unable to effectively manage or expand its retail network and operations or pursue the company growth strategy, its new stores as well as the company existing stores may not achieve its expected level of profitability which may adversely affect its business prospects, financial condition and results of operations.

The company operates certain of stores under a franchise model where the store is owned by a franchise however, all operational control is exercised by the Company. Its may be subject to risks associated with the terms of the franchise arrangement with such third party franchises which could have an adverse impact on the company business prospects, results of operations and financial condition.

Its business is dependent and will continue to depend on the company three manufacturing facilities located in Mumbai, Maharashtra, Jaipur, Rajasthan and Surat, Gujarat, and the company is subject to certain risks in its manufacturing process. Any accidents, slowdown or shutdown in its manufacturing operations or strikes, work stoppages or increased wage demands by its employees that could interfere with the company operations could have an adverse effect on its business, financial condition and results of operations.

The company obtain gold on loan basis, which remains subject to RBI regulations. Any adverse change in the regulations governing gold on loan basis may adversely affect its financial condition and results of operations.

The company is dependent on a number of key personnel, including its senior managerial personnel, and the loss of, or its inability to hire, retain, train, and motivate qualified personnel could adversely affect the company business, results of operations and financial condition.

Its pricing methodologies may be impacted by a number of factors and the company may not always be successful in attracting and retaining customers which could have an adverse impact on its business, results of operation and financial condition.

If the company is unable to protect its intellectual property and proprietary information, or if the company infringe the intellectual property rights of others or are unable to distinguish the "BlueStone" brand name from other brands, its business, financial condition, cash flows and results of operations may be adversely affected.

Its Registered and Corporate Office, stores and manufacturing facilities are on lease, leave and license or rental ("Lease(d)") basis. If the company fails to renew these Lease arrangements on competitive terms or if the company is unable to manage its Lease costs, the company results of operations would be materially and adversely affected.

The company relies upon the services of third party providers such as payment card networks, banks, payment processors and payment gateway providers for its business and operations. A failures by such service providers to provide adequate levels of service could have an adverse impact on its business, financial condition and results of operations.

Any failures in its quality control processes may have an adverse effect on the company business, results of operations and financial condition.

Jewellery purchases are discretionary and are often perceived to be a luxury purchase. Any factor which may bring discretionary spending by customers under pressure may adversely affect its business, results of operations and financial condition.

The company relies on mobile operating systems and their application marketplaces to make its mobile application available to participants that utilize the company app, and if the company does not effectively operate with or receive favorable placements within such application marketplaces and maintain favorable reviews, its usage or brand recognition could decline and the company business, financial results, cash flows and results of operations could be adversely affected.

The company has discontinued its `Shop-In-Shop` ("SIS") channel and corporate channel. The company cannot assure you that its offline channels will be successful, and that the company will be able to grow its offline channels.

Any variation in the utilisation of the Net Proceeds from the Offer as disclosed in this Red Herring Prospectus shall be subject to certain compliance requirements, including prior Shareholders` approval.

Its funding requirements and the proposed deployment of gross proceeds are not appraised by any bank, financial institution, or any other independent agency, and the company has not entered into definitive agreements in relation to the objects of its Offer, which may affect the company business and results of operations. Further, the schedule of the implementation of the Objects for which funds are being raised in the Offer, is subject to risk of unanticipated delays in implementation and cost overruns.

An inability to maintain adequate insurance cover in connection with its business may adversely affect the company operations and profitability.

Any future acquisitions, strategic investments, entries into new businesses and divestitures could disrupt its business, divert the company management`s attention, result in additional dilution to its shareholders, and harm the company business.

Its online listings or reviews may constitute internet advertisement, which subjects it to laws, rules and regulations applicable to advertising and penalties for violation of such laws, rules and regulations.

The company is required to obtain, renew or maintain certain statutory and regulatory permits and approvals required to operate its business, and if the company fails to do so in a timely manner or at all, or these requirements are made more stringent, its may be unable to fully or partially operate the company business and its results of operations may be adversely affected.

Failures in internal control systems could cause operational errors which may have an adverse impact on its profitability.

If the company fails to comply with laws relating to privacy and data protection, its may be subject to significant liability, negative publicity, an erosion of trust and increased regulation, which could materially and adversely affect the company business, results of operations and financial condition.

Its focus on using sustainable materials and environmentally friendly manufacturing processes, product handling and supply chain practices may increase our cost of revenue and hinder the company growth.

Its business is manpower intensive. The company business may be adversely affected by work stoppages, increased wage demands by its employees, or increase in minimum wages across various states, and if the company is unable to engage new employees at commercially attractive terms.

Its Promoter, certain of the company Directors, Key Managerial Personnel and Senior Managerial Personnel may have interests other than reimbursement of expenses incurred and normal remuneration or benefits.

The Company has not paid and may not be able to pay dividends or undertake bonus issue in the future.

The average cost of acquisition of Equity Shares by our Promoter and Selling Shareholders may be less than the Offer Price.

The company has issued Equity Shares and Preference Shares during the preceding twelve months at a price which may be below the Offer Price.

Increases in operational costs could adversely affect its results of operations.

Grants of stock options under its employee stock option plans may result in a charge to the company statement of profit and loss account and, to that extent, adversely affect its business, financial condition, results of operations and prospects.

Industry information included in this Red Herring Prospectus has been derived from a third party industry report prepared by RedSeer Management Consulting Private Limited, exclusively commissioned and paid for by it.

The company has in this Red Herring Prospectus included certain non-GAAP financial measures and certain other industry measures related to its operations and financial performance. These non-GAAP measures and industry measures may vary from any standard methodology that is applicable across the industry in which the company operates, and therefore may not be comparable with financial or industry related statistical information of similar nomenclature computed and presented by other companies.

Significant differences exist between Ind AS and other accounting principles, such as U.S. GAAP and IFRS, which investors may be more familiar with and may consider them material to their assessment of its financial condition.

The difference between the GST incurred on the services acquired by the Company and the GST payable on the sale of jewellery may affect its cash flow and impact the company financial conditions.

The Offer Price, market capitalization to revenue multiple and enterprise-value-to-EBITDA ratio based on the Offer Price of the Company, may not be indicative of the market price of the Company on listing or thereafter.