SEBI, the regulatory board of India has provided Kalyan Jewellers India Ltd with the go-ahead to raise ₹ 1,750 crores through an initial share-sale. The Initial Public Offering comprises issuance of fresh equity aggregating up to Rs 1,000 crore and an offer for sale (OFS) worth Rs 750 crore, according to the Draft Red Herring Prospectus (DRHP).
T S Kalyanaraman, a Kalyan Jewellers promoter would unload shares worth ₹ 250 crores. Also, Highdell Investment Ltd would sell shares up to the worth of ₹ 500 crores through the OFS route.
Kalyan Jewellers had filed draft papers for IPO in August which thereafter obtained SEBI’s observation on October 15. It is necessary for any company that is offering an initial public offer (IPO), or follow-on public offer (FPO) to achieve SEBI’s observation.
The proceeds from the fresh issue of shares would be used for working capital requirements and general corporate purposes. Before the offer, T S Kalyanaraman a 27.41 percent stake in the company while T K Seetharam and T.K Ramesh the other two promoters 22.17 percent stake in the company each. Highdell, the investor that will sell its stake through the OFS has a 24 percent stake in the company pre-offer.
Kalyan Jewellers India Ltd had 107 showrooms across 21 states and Union Territories in India, and 30 showrooms in the Middle East at the end of June this year. The Indian jewelry showroom chain was founded by T.S. Kalyanaraman who also acts as the Chairman and Managing Director of the firm. Sanjay Raghuraman serves as the CEO of the company. They have their headquarters in Thrissur, Kerala, and has over 8000 employees worldwide.
In the company, the promoters hold a 76% stake currently, while the remaining 24% is held by private equity firm Warburg Pincus. Warburg Pincus first invested ₹ 1200 crore in 2014 and again backed it with another ₹ 500 crore investment which they made in 2017.
The company specializes in gold jewelry and provide their services as they designs, manufactures, and sells a wide range of gold, studded, and other jewelry products.
The global coordinators and book running lead managers to the offer are Axis Capital, Citigroup Global Markets India, ICICI Securities, and SBI Capital Markets.
The capital markets watchdogs had asked for clarification from the merchant banker regarding the company’s public issue last month.
The company reported a 3.3 percent hike in revenues at ₹ 10,101 crores in the year that ended in March 30, 2020. The company also had posted a net profit of ₹ 145 crores in FY20. The company’s profit in FY20 was 487 percent higher than that in FY19.