Kalyan Jewellers IPO opens March 16; check price band, issue size, grey market premium, details

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March 11, 2021 10:52 AM

Kalyan Jewellers India's Rs 1,175-crore initial public offering (IPO) will open for subscription on March 16, 2021, at a price band of Rs 86-87 per share of face value of Rs 10 each

Kalyan is backed by private equity major Warburg Pincus, which has a 24 % stake through its investment arm Mauritius-based Highdell Investment.Kalyan is backed by private equity major Warburg Pincus, which has a 24 % stake through its investment arm Mauritius-based Highdell Investment.

Kalyan Jewellers India’s Rs 1,175-crore initial public offering (IPO) will open for subscription on March 16, 2021, at a price band of Rs 86-87 per share of face value of Rs 10 each. The public issue will close for subscription on March 18, 2021. The issue comprises fresh issue of equity shares worth Rs 800 crore and offer-for-sale (OFS) worth Rs 375 crore by promoters and shareholders. The OFS comprises selling up to Rs 125 crore worth shares by promoter TS Kalyanaraman, and Rs 250 crore by Highdell Investment Ltd. Equity shares of Kalyan Jewellers India Ltd are proposed to be listed on BSE and NSE. No grey market activity was seen in Kalyan Jewellers India shares.

Investors can bid for a minimum of 172 equity shares and in multiples thereafter, implying a minimum investment of Rs 14,964, at the upper price band. Not more than 50 per cent of the issue will be reserved for the qualified institutional buyers (QIBs), 35 per cent for retail investors and 15 per cent for non-institutional investors. Shares worth Rs 2 lakh will be reserved for eligible employees. Also, a discount of Rs 8 per share is also being offered to eligible employees bidding in the employee reservation portion.

Axis Capital, Citigroup Global Markets India Private Ltd, ICICI Securities Ltd and SBI Capital Markets are the global co-ordinators and book running lead managers to the issue. BOB Capital Markets Ltd will also be the book running lead manager while Link Intime India Private Ltd will be the registrar to the offer. Kalyan Jewellers will join the listed peer Titan Company Ltd, which has a P/E of 84.23x. The company has proposed to utilise the net proceeds for funding working capital which stands around Rs 600 crore and for general corporate purposes.

A portion of Kalyan Jewellers India’s operations are located in countries in the Gulf Cooperation Council, where it generated 21.81 per cent, 23.46 per cent, 21.19 per cent, 13.79 per cent and 21.36 per cent of its revenue from operations for fiscals 2020, 2019 and 2018, and for the nine months ended December 31, 2020, and 2019, respectively. Tanishq (Titan Company Limited) is the leader in the Indian Jewellery market with a 3.9 per cent share of the overall jewellery market and a 12.5 per cent share of the organized jewellery market, based on Fiscal 2019. For the same period, Kalyan Jewellers had a 1.8 per cent share of the overall jewellery market and a 5.9 per cent share of the organized jewellery market.

There are few multi-regional players such as Tribhovandas Bhimji Zaveri (TBZ), Malabar, Joyalukkas, PC Jeweller and Senco Gold, which are largely focused in certain regions but have expanded and opened stores in other regions, although to a certain and limited degree. Currently, taxes on gold include customs duty of 12.5 per cent and GST of 3 per cent. However, in the recent budget of 2021, the government reduced the customs duty to 7.5 per cent.

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