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Kalyan Jewellers IPO day 1: Issue witnesses 41% subscription, retail portion booked 77%

KR Choksey gives a subscribe rating to the issue as it anticipate listing gains looking at the growth potential in the company.

March 16, 2021 / 07:38 PM IST

The initial public offering of Kalyan Jewellers has witnessed a subscription of 41 percent, so far, on the first day of bidding. Retail investors have put in the highest number of bids as the reserved portion for them has been subscribed 77 percent.

The public issue has so far received bids for over 3.95 crore equity shares against the offer size of 9.57 crore shares, as per the subscription data available on exchanges.

The portion set aside for non-institutional investors is subscribed 13 percent and that of employees is booked 7 percent. Qualified institutional buyers have put in bids for over 1 lakh shares compared to the reserved portion of over 2.72 crore equity shares.

Kalyan Jewellers is planning to raise Rs 1,175 crore through public offer, of which it has already garnered Rs 352 crore from anchor investors on March 15. The issue will close on March 18.

The IPO consists of a fresh issue of Rs 800 crore and an offer for sale of Rs 375 crore by promoter and investors. The price band for the offer was fixed at Rs 86-87 per share.

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Also read our in-house research team's take on Kalyan Jewellers IPO

Kalyan Jewellers to launch IPO today: 10 things you should know

"Kalyan Jewellers faces competition from both organised and unorganised sector companies. They have established a pan-India presence with strong brand recognition throughout India and the Middle East, while concurrently having numerous grassroots marketing initiatives, such as their 'My Kalyan' network, which allow them to compete with organized and unorganized jewellery companies at a regional and local level across a wide range of geographies," said KR Choksey.

The brokerage has assigned a subscribe rating to the issue as it expects strong listing gains.

At the upper band of the issue price, Kalyan Jewellers will trade at an EV/EBITDA multiple of 22 times of its annualized 9MFY21 revenue. In comparison, Titan is trading at 79.8x and TBZ at 7.5x, the brokerage said.

Also read - Kalyan Jewellers IPO opens for subscription today: Should you subscribe?

Kalyan Jewellers traded at a 7-8 percent premium (Rs 6-7) in the grey market, i.e. at a price of Rs 93-94 against higher price band of Rs 87 per share, the IPO Watch data showed.

Disclaimer: The views and investment tips expressed by investment expert on Moneycontrol.com are his own and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
Moneycontrol News
first published: Mar 16, 2021 01:16 pm
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