Kalyan Jewellers India Ltd, the Warburg Pincus-backed chain of jewellery stores, is planning to file draft papers for an initial public offering within a month with the markets regulator, three people aware of the development said.
“They are looking to file the draft document sometime next month,” said one of the three people cited above, requesting anonymity, as he is not authorized to speak to reporters.
According to the second person cited above, the company is looking to raise around Rs2,500 crore.
“The IPO is a mix of primary fundraise that the company will use to fund expansion of its domestic and new overseas markets and a secondary share sale, primarily by private equity investor Warburg Pincus, which will be selling part of its stake in the company,” he said. He too requested anonymity.
Investment banks Axis Capital, UBS and ICICI Securities are managing the initial share sale, he added.
Kalyan Jewellers opened its first store at Thrissur in Kerala in 1993. The company founded by T.S. Kalyanaraman counts Bollywood actor Amitabh Bachchan as its brand ambassador.
In April 2017, Warburg invested Rs500 crore in Kalyan Jewellers, adding to the Rs1,200 crore it invested in 2014, to help the jeweller enter new markets Saudi Arabia, Bahrain, Oman, Singapore and Malaysia.
Emails sent to Axis Capital and ICICI Securities did not elicit any response. Warburg Pincus, Kalyan Jewellers and UBS declined to comment.
The move comes at a time when the jewellery industry is facing negative sentiment following the fraud at Punjab National Bank (PNB) involving Nirav Modi and Gitanjali Gems Ltd, impacting the stock price of a majority of gems and jewellery companies.
On 14 February, state-run PNB told stock exchanges that said it has unearthed fraudulent transactions of around Rs11,400 crore at one of its branches in Mumbai. The bank said it has filed a complaint with the Central Bureau of Investigation (CBI) on the fraud. The case involves fraudulent transaction by Modi and Mehul Choksi, who are being investigated by multiple probe agencies. It is alleged that Modi and others conspired with several PNB employees to fraudulently obtain loan guarantees.
On Friday, Mint reported that of the 46 listed jewellery stocks on the BSE, only 11 have logged gains since the close of 13 February, while 26 have shed value since the fraud surfaced.
“While there is a near-term sentiment impact for the sector because of the PNB issue, one cannot paint the whole industry with the same brush. Kalyan is a pure B2C, retail jewellery company with over 130 stores and a topline of around Rs10,000 crore and is not involved in the same business lines as the companies at the centre of the current controversy,” said the third person cited above. He too requested anonymity.
According to media reports, other jewellery companies such as Joyalukkas India Pvt. Ltd and Senco Gold Ltd are also planning to go public. However, the IPO plans of these companies are currently at an early stage and they have not filed draft documents with the regulator.
In 2017, 36 companies raised Rs67,147 crore through the IPO route, while 26 companies raised Rs26,493.8 crore in 2016, data from primary market tracker Prime Database shows.
Source: Mint