Updated: March 16, 2021 10:37:54 am
Kalyan Jewellers IPO: The initial public offering (IPO) of Kalyan Jewellers India will open for subscription on Tuesday, March 16, 2021, at a price band of Rs 86-87 per share. The offer will be available for subscription till Thursday, March 18, 2021.
The Thrissur-based company is in the organised premium jewellery sector and ahead of its Rs 1,175 crore IPO, Kalyan Jewellers raised nearly Rs 352 crore (Rs 3,51,89,99,925.00) from 15 anchor investors, data from the stock exchanges showed.
The anchor investors include the Government of Singapore, Monetary Authority of Singapore, HDFC Life Insurance Co Ltd, and BNP Paribas Arbitrage.
The IPO comprises issuance of fresh equity aggregating up to Rs 800 crore and an offer for sale (OFS) worth Rs 375 crore. The proceeds of the issue would be utilised for working capital requirements and general corporate purpose.
The OFS comprises selling up to Rs 125 crore worth shares by Kalyanaraman, and Rs 250 crore by Highdell Investment, an affiliate of Warburg Pincus.
Investors who wish to subscribe to Kalyan Jewellers IPO can bid in the lot of 172 equity shares and multiples thereof. At the upper price band, they will have to shell out Rs 14,964 to get a single lot of Kalyan Jewellers. The shares will be listed on both BSE and National Stock Exchange (NSE).
At the end of June 2020, the company had 107 showrooms across 21 states and Union Territories in India, and 30 showrooms in the Middle East. Upon its listing, it will join the likes of Titan Company and PC Jeweller.
Axis Capital, Citigroup Global Markets India, ICICI Securities, SBI Capital Markets and BOB Capital Markets are the book running lead managers to the IPO while Link Intime India is the registrar of the issue.
The research teams at Geojit Financial Services, Reliance Securities and Angel Broking in their respective notes have recommended “Subscribe” to the offer while those at ICICI Securities kept the IPO “unrated”.
Geojit Research in its IPO note said, “At the upper price band of Rs 87, the pricing is on the higher side, but on a long-term basis, Kalyan jewellers is available at 1 year forward estimated P/E of 25x (on FY23E basis). Given forecasted improvement in profitability & balance sheet, India’s appetite for gold, strong pan India presence, brand recall and diversified product offering, we assign a “Subscribe” rating on a long-term basis.”
Reliance Securities in its IPO note stated, “The IPO is valued at 58.4x of FY20 EPS, which looks to be reasonably priced. We believe the organized players in jewellery segment should get healthy traction in the coming years due to increased preference for branded jewellery. Further, KJIL’s focus on increasing revenue contribution from high-margin studded jewellery is expected to improve its overall margin. This along with continued addition of new showrooms is expected to ensure a sustainable growth for KJIL in the long-run. Further, robust OCF yield looks impressive. Hence, we recommend SUBSCRIBE to the issue.”
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