Kalyan Jewellers Initial Public Offering(IPO) starts today. The company has kept it’s company share price in the range of Rs 86-87. Kalyan Jewellers, the second-largest jeweller of India, plans to collect a total of Rs 1175 crore from it’s IPO. Titan is the largest jeweller in India. If we talk about the valuation, Kalyan Jewellers are nowhere near to the market cap of Titan.
Kalyan IPO Details and Funding Raise
From the IPO proceeding of Rs 1175 crore, Rs 250 crore will be transferred to Highdell, an early investor of Kalyan Jewellers. Highdell wants to partially exit from The Kalyan operations. IPO of Kalyan Jewellers will close on Thursday. Company promoters will get Rs 125 crore, whereas Rs 800 crore will go to the company’s account for different corporate-related works. Following the IPO, promoter holding in the company will come down to 60.5% from 68%.
Before IPO opening, Kalyan Jewellers collected a whopping amount of Rs 352 crore. This money was raised from 15 anchor investors. The company paid 4.01 crore shares at a rate of Rs 87. Singapore’s GIC, Sundaram Mutual Fund, HDFC Life Insurance Company, Calypso Global Investment Fund, Segantii India Mauritius, Kuber India Fund, Moon Capital Trading PTE. Ltd, Edelweiss Crossover Opportunities Fund (Series-II), Baroda Large and Mid-Cap Fund, BNP Paribas Arbitrage-ODI, Cohesion MK Best Ideas Sub Trust participated in the anchor funding round.
Kalyan Jewellers started its operations as a regional firm in 1993. Later, it started operation in the whole of India and the Middle East. At the end of the year 2020, it opened 107 showrooms in India, and 30 in the middle east. The company mainly deals in Gold. More than 70% of revenue comes from Gols, whereas the remaining 30% comes from studded and other jewellery items. Kalyan Jewellers manufactures gold by itself. Not only manufacturing, but it also designs all products at the home to sell them.
Revenue and other Financial Details of Kalyan Jewellers
Financially, Kalyan Jewellers have no competition with Titan. It has limited financial value when comparing with Titan. In the last 2 years, Kalyan net sales saw a decline of 4% to Rs 10101 crore. It had a net profit of Rs 142 crore in these 2 years. If we talk about Titan Company in the last 2 years, it’s business surged by 31%. Titan operating margin is 12% compare to Kalyan’s 5.2%. Titan saw a good return on equity in FY20. It was 24% compared to Kalyan’s at 6.6%.
The current financial year of 2021 did not bring any good news for Kalyan Jewellers. It has a total of 30% year on year revenue fall to Rs 5516 crore. This is mainly due to the covid pandemic. These numbers are based on the last 9 months activities of FY2021. Last year, Kalyan Jewellers posted a net loss of Rs 80 crore compare to Rs 94 crore profit a year ago. The company has a total of Rs 2691 crore borrowings from short term loans.