The wave of IPO’s is not finding any resistance as Kalyan Jewellers has received green signal from SEBI to raise Rs. 1,750 crore through initial share sale. The issue size of Rs. 1,750 crores is a mix of offer for sale and fresh issue. According to Draft Red Herring Prospectus, the issue comprises of Rs. 1,000 crores to be raised from issuance of fresh equity while the residual amount of Rs.750 crores will be an Offer for Sale. The promoters of the company T S Kalyanraman and Highdell Investments are offloading their stake worth of Rs. 250 rores and Rs. 500 crores respectively. The net proceeds from issuance of shares worth of Rs. 1,000 crores will be utilized for taking care of working capital requirements and general corporate purposes.
Indian family culture is known for purchasing gold on every auspicious occasion and Kalyan Jewellers have strong footprints in the Indian gold ornaments market since 1993. The company has deep understanding of India’s taste and preferences in jewellery designs of gold, diamond, precious stones and other precious metals. The jewellery-maker has always worked in the interest of customer needs and awareness. The company has conducted several campaigns to educate customers about pricing, purity and other aspects. As on June 2020, the company has 137 showrooms across India and GCC. The company has expanded its business across India, GCC, USA, Singapore, Malaysia, Sri Lanka and more.
On the financial front, the company had reported 1,422.75 crores net profit this year. The company do not claims the tag of debt-free as a whooping amount of Rs. 782.9 crores in the form of non-current liability is occupied in balance sheet. In the listed space, the company will face tough competition from largest player Titan, PC Jewellers, Rajesh Exports and Thangamayil.
Axis Capital, Citigroup Global Markets India, ICICI Securities and SBI Capital Markets are the global coordinators and book running lead managers to the offer.
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The Town Jewel of Indian IPO comes calling!
Kalyan Jewellers launched its IPO on March 16th. As one of the country’s leading jewellery houses, the company has a pan-Indian presence and has successfully catered to the high-end ornamental demands of the consumers.
However, a combination of looming debts, unremarkable performance over the recent fiscals and dwindling investments into precious metals has posed challenging prospects for the long-term financial needs of the company.
Click on the link below to read a detailed background on the company’s financials and business growth.