A91 Partners in talks to invest in jewellery retailer ORRA at Rs 2,000 crore valuation

A91 Partners in talks to invest in jewellery retailer ORRA at Rs2,000 cr valuation

Investment fund A91 Partners is in talks to pick up a minority stake in ORRA Fine Jewellery, a retailer specialising in diamond-studded jewellery, at a valuation of about Rs 2,000 crore, people aware of the development told Moneycontrol.

Mumbai-based A91 Partners is expected to invest Rs 250-300 crore into ORRA, they added. The deal is likely to value the jewellery retailer at Rs 1,800-2,000 crore, the people said.

“The investment from A91 will be used by ORRA to expand its network, which currently stands at under 100 stores. It will also use the capital to scale up its omni-channel presence. Money will also be used for marketing and brand building,” said one person.

Abhay Pandey, general partner at A91 Partners, declined to comment. Emails sent to ORRA and the company’s promoters did not elicit a response.

“ORRA has seen strong revenue growth over the last two years. A majority of the company’s sales come from diamond-studded jewellery, which has higher margins. The company delivered earnings before interest, taxes, depreciation and amortisation of about Rs 100 crore in FY23,” the person said.

Financials

ORRA’s revenue jumped 82 percent to Rs 950.9 crore in FY23 from Rs 522.9 crore in the previous financial year, as per a credit rating report by ICRA. The jewellery retailer reported revenue of Rs 879 crore in the first nine months of FY24, ICRA said. Profit increased to Rs 19.5 crore in FY23 from Rs 14 crore in the previous year.

ICRA noted that the share of margin-accretive diamond-studded jewellery within the overall sales mix of ORRA has increased to 80-85 percent from 50 percent over the past five years, which led to improved operating profit margins.

ORRA operates 90 stores in more than 27 cities in India.

ORRA's revenues is geographically diversified, with the western region accounting for 36 percent of retail sales, followed by the southern and the northern regions, accounting for 18 percent each, ICRA said.

"The balance of around 28 percent comes from corporate sales. ORRA further plans to add 12-18 stores each year in the near-to-medium term across tier-I and tier-II cities, which will further diversify its geographical mix and contribute to revenue growth,” it said.

Investments in jewellery sector

India’s jewellery sector has seen many investments over the years, with the biggest one in 2014, when US private equity firm Warburg Pincus invested Rs 1,200 crore in Kerala-based jewellery company Kalyan Jewellers. In the same year, SAIF Partners (now known as Elevation Capital) invested about Rs 80 crore in Kolkata-based jewellery retail chain Senco Gold.

Giva, where A91 is an investor, raised Rs 200 crore in July 2023 in a round led by Premji Invest.

Last month, private equity firm Lighthouse invested Rs 284 crore in fashion and silver jewellery brand Kushal’s.