Kalyan Jewellers shares initial public offer (IPO) on March 16

Kalyan Jewellers India Ltd. will sell shares at Rs 86-87 apiece in its initial public offer on March 16, joining the primary market rush that has continued into 2021.

Kalyan Jewellers shares initial public offer (IPO) on March 16

The Warburg Pincus-backed company plans to raise Rs 1,175 crore in a combination of fresh issue and an offer for sale. The jeweller scaled down the size from Rs 1,750 crore in August 2020 when it filed its draft red herring prospectus.

The largest pan-India jeweller after Titan Co. will issue 9.19 crore shares worth Rs 800 crore, according to its red herring prospectus. Promoters TS Kalyanaraman and Highdell Investments Ltd., an investment arm of Warburg Pincus, will sell 4.31 crore shares amounting to Rs 375 crore.

Key Details

  • Issue open: March 16-18.
  • Face value: Rs 10 per share.
  • Fresh Issue: 9.19 crore shares valued at Rs 800 crore.
  • Offer for sale: 4.31 crore shares valued at Rs 375 crore.
  • Issue size: Rs 1,175 crore.
  • Price band: Rs 86-87 apiece.
  • Minimum lot size: 172 shares.
  • Listing On: National stock Exchange and BSE.
  • Book running lead managers: Axis Capital, Citigroup Global, ICICI Securities, SBI Capital Markets, BOB Capital Markets.

The issue constitutes 13.1% of the company’s fully diluted equity and values the jeweller at Rs 8,961.5 crore at the higher end of the price band. The IPO price is higher than the recent allotment of 9.88 crore equity shares to Highdell at Rs 50.58 on March 4, pursuant to the conversion of 11.90 crore compulsory convertible preference shares held by the private equity arm.

Use of Proceeds

The company will use Rs 600 crore to fund working capital requirement and the rest for general corporate purposes.

Business Profile

The jeweller makes gold, studded and other jewellery for regular wear to special occasions like weddings. Gold jewellery contributes nearly two-thirds of the revenue from operations.

The company is a hyperlocal jeweller with a ‘My Kalyan’ network of service centres around its showrooms. The jeweller employs 2,699 people at these centres for door-to-door and other direct marketing efforts within local communities to showcase the catalogue, enrol customers to make advance payments for buying gold in the future and drive traffic to its nearest showrooms.

Read More : Gold prices today rises but down ₹11,500 from record highs, silver rates up

Retail Presence

The jeweller, which started its operations in Kerala, had 107 showrooms located across 21 states and union territories as of December. 35 of those outlets are in South India, while 30 are in the Middle East.

  • As of December, 78.19% of the revenue came from India and the remaining 21.81% from the Middle East.
  • The company has 766 ‘My Kalyan’ grassroot stores which contributed 21% to the revenue.


According to its prospectus:

  • Operations outside South India contributed 57.69% of its gross profit and 47.81% of its revenue in the financial year ended March 2020.
  • Contribution stood at 49.92% of gross profit and 40.4% of revenue in the nine months ended December.
  • 51.29% of Kalyan’s FY20 revenue came from outside of tier-I cities. That rose to 53.08% in the nine months ended December.
  • The company posted a loss of Rs 81.9 crore in April-December because of Covid-19. The company had availed moratorium to defer payments to certain loans.

The company has Rs 55.7 crore in long-term borrowings and Rs 2,635.5 crore in short term borrowings, including fund interest of Rs 30.8 crore on account of Covid-19 moratorium. Total debt, including metal gold loans, was Rs 3,667 crore as of December.

Risk Factors

  • The coronavirus pandemic likely to have had a significant effect on operations, and negatively impacted business, revenues, financial condition and results of operations.
  • May not be able to respond to consumer demand and market trends on time.
  • Unable to maintain or establish arrangements with contract manufacturers and suppliers.
  • Ownership of retail outlets in Middle East countries is subject to restrictions in the GCC countries.
  • The current geographic concentration of operations creates an exposure to local economies, regional downturns and severe weather or other catastrophic occurrences. In 2018-19, the company operations were hit severely due to floods in Kerala which account for nearly 10% of the revenue.

Competition & Kalyan Jewellers shares

Kalyan Jewellers is the second-largest pan-India jewellery retailer, after Tanishq (Titan), in the country.

Kalyan Jewellers shares initial public offer (IPO) on March 16 via @goldsilverrepor
  • Save

Leave a Comment

Share via
Copy link