Last updated: 16 Mar, 2021 | 07:44 am
Kalyan Jewellers is set to raise up to Rs 1,175 crore via IPO which opened on 16th March, Tuesday. Here are the details:
About Kalyan Jewellers
About the issue
Issue open: 16th March- 18th March 2021
Price band: Rs 86- Rs 87 per share
Issue Size: Rs 1,175 crore (Gross)
Issue Size: The issue is a combination of fresh issue and offer for sale. Kalyan Jewellers will issue 9.19 crore shares worth Rs 800 crore. Promoters TS Kalyanaraman and Highdell Investments Ltd., an investment arm of Warburg Pincus, will sell 4.31 crore shares amounting to Rs 375 crore.
Reservation for QIB: 50% , Retail - 35%, Non institutional Investors -15%. The company has reserved 2 crore shares for employees. Employees are eligible for a discount of Rs 8 per share.
Bid lot: 172 shares, and in multiples of 172 shares
At the higher end of the price band, Kalyan Jewellers is aggressively priced at a P/E ratio of about ~63 times FY20 consolidated EPS (on fully-diluted basis). As the company has reported losses in the Apr-Dec 20 period, it cannot be valued using annualised 9MFY21 price-earnings ratio. The valuation is expensive, considering the company muted financial performance over the last few years.
The nearest comparable listed peer Titan Company Ltd has much superior margins and return ratios as compared to Kalyan Jewellers. Given muted topline and bottomline growth, low margins and return ratios and expensive valuations, we remain ‘Neutral’ on the prospects of the issue.