On Friday, Kalyan Jewellers India’s stock had a shaky start on the stock exchanges. Kalyan Jewellers’ stock opened at Rs 73.90 per share, down Rs 13.10 or 15.06 percent from its initial public offering price of Rs 87 per share. Kalyan Jewellers competes with Titan Firm, Tribhovandas Bhimji Zaveri (TBZ), Malabar, Joyalukkas, PC Jeweller, and Senco Gold, among others, in the gold and diamond jewellery industry. Kalyan Jewellers India had a market capitalization of Rs 7,612.09 crore when it went public. Investors more than 2.5 times subscribed to Kalyan Jewellers India’s Rs 1,175 crore initial public offering. Kalyan Jewellers India, along with Suryoday Small Finance Bank, became the fourteenth stock to debut after a strong listing.
Warburg Pincus, a private equity firm, has a 24 percent stake in Kalyan through its Mauritius-based investment arm, Highdell Investment. Warburg Pincus made two separate investments, the first for Rs 1,200 crore in 2014 and the second for Rs 500 crore in 2017. The company had 107 showrooms in India, spread across 21 states and union territories, and 30 showrooms in the Middle East as of June 30, 2020. Kalyan Jewellers is a company that designs, produces, and sells a variety of gold, studded, and other jewellery.
The Kalyan Jewellers India issue received a ‘subscribe’ ranking from four out of six research and brokerage firms. Kalyan Jewellers India Ltd has aggressively expanded its store in recent years, and it continues to do so. Revenue and profitability are expected to improve at Geojit Financial Services, thanks to a strong contribution from new stores. The company’s management team has vast experience in the jewellery and retail industries and is based in Kerala. The analysts identified several main risks to the issue, including the issue’s high valuation compared to peers, which could have an effect on short-term profitability, gold price volatility, seasonality of business and the impact of government policies, and high competition from both organized and unorganized players.
According to ICICI direct Research, Kalyan Jewellers’ gross margins increased from 16 percent in FY18 to 18 percent in 9MFY21, thanks to a higher share of studded ratio. In recent years, it has undergone difficulties. For example, extreme floods in south India impacted revenues in FY19 (60 percent of revenues), while revenue in FY20 was negatively impacted in Q4 due to Covid-led lockdowns.
