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Exclusive | Warburg Pincus-backed Kalyan Jewellers files DRHP for Rs 1,750-crore IPO

The initial public offering is expected to facilitate a partial exit for the private equity major and help the Kerala-based jewellery company reduce debt.

August 24, 2020 / 10:30 PM IST

Kalyan Jewellers, a leading jewellery retailer backed by private equity major Warburg Pincus, has filed its DRHP (draft red herring prospectus) with market regulator SEBI on August 24 for a proposed IPO (initial public offer) which plans to raise Rs 1750 crore, the Kerala-based firm said.

Moneycontrol was the first report the DRHP filing earlier today and had also reported the revival of the jeweller’s listing plans on August 1, 2020. The last listing by a  pure-play jewellery player was nearly 8 years back when the Rs 600 crore PC Jewellers IPO opened in December 2012.

According to the official release, the IPO comprises equity shares of face value of Rs 10 each of Kalyan Jewellers, comprising a fresh issue aggregating up to Rs 1000 crore and an offer for sale aggregating up to Rs 750 crore, which includes Rs 250 crore by the promoter TS Kalyanaraman and up to Rs 500 crore by Warburg Pincus arm Highdell Investment Ltd. The offer includes a reservation aggregating up to Rs 2 crore for subscription by eligible employees.

The Global Co-ordinators and Book Running Lead Managers (GCBRLMs) to the IPO are Axis Capital Limited, Citigroup Global Markets India Private Limited, ICICI Securities Limited and SBI Capital Markets Limited. The Book Running Lead Manager (BRLM) to the IPO is BOB Capital Markets Limited. Law firm AZB & Partners is the counsel to the company, Khaitan & Co advised the investment banks and Warburg Pincus was advised by Cyril Amarchand Mangaldas.

“The IPO will facilitate a partial exit for Warburg Pincus, and the proceeds will be used for working capital, store expansion and debt reduction,” sources told Moneycontrol.

Close

The filing comes at a time when the jewellery sector, pounded earlier due to the outbreak of COVID-19, is betting on the wedding and festive season for a full-fledged revival. Gold prices have also been choppy since hitting record highs of around Rs 56,200 on August 7, 2020.  On the other hand, stocks of listed players in the segment like Titan, Vaibhav Global and Renaissance Global have risen sharply in the last three months.

“Around 80 percent of our showrooms are currently operational and we are witnessing normalcy as far as footfalls are concerned. Sales have picked up and we are almost close to the same-store performance of this time last year, “ said Kalyan Jewellers CMD TS Kalyanaraman in a recent report.

THE PRIVATE EQUITY CONNECTION

Warburg Pincus has collectively invested around Rs 1,700 crore in two tranches in Kalyan Jewellers. Its initial investment of Rs 1,200 crore in 2014 was the biggest private equity investment ever in the jewellery sector in India, followed by a second smaller round of Rs 500 crore in 2017. It holds a 24 per cent stake in the firm.

KNOW YOUR JEWELLER!

Kalyan Jewellers was established by its founder and one of the Promoters, TS Kalyanaraman, who has over 45 years of retail experience, of which over 25 years is in the jewellery industry. The company started its jewellery business in 1993 with a single showroom in Thrissur, Kerala.

It is a pan-India jewellery company, with 107 showrooms located across 21 states and union territories in India, and also has an international presence with 30 showrooms located in the Middle East as of June 30, 2020. All of its showrooms are operated and managed by the company. In Fiscal 2020, revenue from operations of Kalyan Jewellers stood at Rs. 10,010 crore of which 78.19 percent was from India and 21.81 percent from the Middle East. Kalyan Jewellers also sells jewellery through its online platform at www.candere.com.
Ashwin Mohan
first published: Aug 24, 2020 11:15 am
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