Amid Soaring Gold Prices, Multibagger Jewellery Stock Gives 300% Returns to IPO Allottees in Two Years

As global gold prices hit record highs, one small-cap jewellery company has quietly outshone both the market and its peers. Investors who subscribed to the initial public offering (IPO) of Senco Gold Ltd. in July 2023 have seen their holdings surge nearly 300% in value, turning the stock into a true multibagger within just two years.

From Modest Beginnings to Market Stardom

Senco Gold, a Kolkata-based jeweller with over 75 years of legacy, made its market debut in July 2023 with a price band of ₹301–₹317 per share. The issue was oversubscribed more than 75 times, reflecting strong investor interest driven by its retail dominance in East India and ambitious expansion plans.

Fast forward to May 2025, the stock is now trading above ₹1,250, offering spectacular returns to IPO allottees and long-term investors. This meteoric rise has been fueled by both macroeconomic tailwinds and strategic growth execution by the company.

Gold Prices Shine Bright Globally

The company’s rise has coincided with a strong uptrend in global gold prices. Driven by inflation fears, geopolitical tensions, and a flight to safety among investors, gold recently breached the $2,450 per ounce mark, up nearly 30% from mid-2023 levels. In India, retail gold prices have touched ₹72,000 per 10 grams, a historic high.

“As gold becomes a preferred asset in uncertain economic times, jewellery companies like Senco are benefiting from both higher realizations and increased footfalls during festive seasons,” said Ajay Seth, Senior Analyst at Spark Securities.

Strong Financials and Retail Strategy Pay Off

Despite a relatively modest market capitalization compared to industry giants like Titan, Senco Gold has demonstrated solid financial performance. For FY24, the company reported a 45% increase in net profit and 28% rise in revenue, supported by its growing retail network and an uptick in demand for wedding and festival-related purchases.

“The company’s asset-light franchise model and focus on Tier 2 and Tier 3 cities have helped it scale efficiently,” said Neha Malhotra, VP of Equity Research at Nivesh Disha. “Their ability to balance traditional craftsmanship with modern design has given them a unique customer base.”

Senco operates over 140 showrooms across 13 states, and has consistently expanded both company-owned and franchise outlets.

IPO Investors Reap Windfall Gains

Those who were allotted shares during the IPO at ₹317 per share and held on are now sitting on a 4x return. The surge in stock price has led to increased coverage from institutional analysts and a re-rating of the stock’s valuation multiples.

Moreover, the company has announced regular dividends and is reportedly considering a bonus issue or stock split to improve liquidity.

“This kind of performance is rare among small-cap IPOs,” said Ramesh Kaul, a retail investor who bought into the IPO. “Senco’s focus on core jewellery segments, customer loyalty, and profitable growth has made it a long-term wealth creator.”

Market Context: A Broader Bullish Trend in Gold-Linked Stocks

Senco is not alone in riding the golden wave. Shares of other listed jewellers such as Titan Company, Kalyan Jewellers, and Thangamayil Jewellery have also seen positive momentum, though Senco has clearly outperformed.

The Nifty Smallcap 100 Index has risen by over 20% in the last 12 months, but Senco’s gains have dwarfed that average, underlining its status as a standout performer.

Caution Amid Euphoria: Valuation Risks Ahead?

While analysts remain bullish, some advise caution.

“Senco’s current valuation at over 60x trailing earnings suggests the stock is priced for perfection,” warns Devina Shah, Portfolio Manager at BlueOak Capital. “Any slowdown in gold prices or consumer demand could trigger a correction.”

There are also concerns over the impact of rising interest rates on discretionary spending and whether the recent surge in demand is sustainable in the long term.

However, the company’s management remains optimistic. In its latest investor call, CEO Suparno Mitra emphasized continued expansion, brand-building efforts, and a potential foray into online gold savings products.

Investor Outlook: Glittering, But With a Watchful Eye

For long-term investors, the story of Senco Gold is both inspirational and instructional. The company has delivered stellar returns not just because of rising gold prices, but due to sound business strategy and disciplined execution.

Going forward, investors are advised to monitor:

• Gold price volatility

• Festive and wedding season sales

• Competitive landscape with regional players

• Regulatory changes on gold imports and hallmarking

As always, diversification remains key.