NEW DELHI: The initial public offer (IPO) of Kalyan Jewellers India opened for public bidding on Tuesday. Analysts say the issue is richly valued but there are reasons to subscribe for the long term.
The company and its shareholders plan to raise Rs 1,175 crore from the market. The issue, priced in the range of Rs 86-87, comprises a fresh issue aggregating up to Rs 800 crore, and an offer for sale worth up to Rs 375 crore.
At Rs 87 per share, the stock is available at 0.9 times FY20 market cap/sales, and 63 times FY20 EPS. In comparison, at the current price, Titan is valued at 186.74 times earnings. Despite being relatively cheaper, investors do not seem that enthused about the issue.
Updated Mar 16, 2021 | 10:03 IST
Kalyan Jewellers IPO: Although Kalyan Jeweller is the second-largest jeweller in India after Titan Company, its financial performance is nowhere close to Titan. Representational image
New Delhi: Kalyan Jewellers India, the country s second-largest jeweller after Titan, wants to raise Rs 1,175 crore through an initial public offer (IPO) of shares. The IPO opens today (March 16) and will close on March 18 (Thursday). The company has priced its shares in a band of Rs 86-87.
Out of the IPO proceeds of Rs 1,175 crore, Rs 250 crore would go to Highdell, Warburg Pincus company, which was an early investor in the company. Now it wants to partially exit its investment. promoters of the company will get Rs 125 crore by diluting their stake, and the remaining Rs 800 crore (fresh issue) will go to the company to meet working capital requirements and for other corporate purposes. Following the IPO, promoter holding in the company
ET Intelligence Group: On the back of rally in the broader markets including jewellery stocks, Kalyan Jewellers is coming out with its maiden initial public offering (IPO) to offer partial exit to its investor Highdell, a Warburg Pincus Group company (Rs 250 crore) and promoters (Rs 125 crore) and remaining Rs 800 crore to meet its working capital requirements and other corporate purposes. After the issue, the promoter holding will reduce to 60.5% from 68%.The company’s revenue has been near flat over the past three years with single-digit profitability. However, the IPO is valued at a discount to Titan Industries, the largest peer. Given this and improving growth prospects for the organised jewellery sector, investors with high risk appetite may subscribe to the IPO.