Kalyan Jewellers India Ltd IPO Retail Portion fully Subscribed on Day-1

KOCHI:
Kalyan Jewellers India Limited, one of the largest jewellery companies in India based on revenue as of March 31, 2020, according to the Technopak Report, got an overall subscription of 60% on opening day. The retail portion received a whooping response and has been subscribed fully on day one. Strong brand presence and the hyperlocal nature of this consumer jewellery brand have given impetus to the retail subscription.

Various brokerage houses are giving it a thumbs-up for investors, making it one of the attractive IPOs of the season, especially when multiple IPOs have hit the capital market. Angel Broking, KR Choksey and Geojit Securities are some of leading brokerage firms that have given a SUBSCRIBE rating to the Kalyan Jewellers India Ltd IPO.

Angel Broking in its report says, Kalyan Jewellers is one of India’s largest jewellery companies with a pan-India presence & strong brand equity. It has a wide range of product offerings targeted at a diverse set of customers; and the most importantly the company has a Strong promoter background with extensive experience in retail and jewellery. Angel Broking feels that going forward the company would perform better on the back of strong brand and number of stories in India and internationally.

Geojit Securities in its report says, at the upper price band of Rs.87, the pricing is on the higher side, but on a long-term basis, Kalyan jewellers is available at 1 year forward estimated P/E of 25x (on FY23E basis). Given forecasted improvement in profitability & balance sheet, India’s appetite for gold, strong pan India presence, brand recall and diversified product offering, we assign a “Subscribe” rating on a long-term basis.

KR Chokesy, in its report says, at the upper band of issue price, Kalyan Jewellers will trade at an EV/EBITDA multiple of 22x of its annualized 9MFY21 revenue, which is at a discount to its listed peer like Titan (79.8x), however it is likely to trade at a premium to its peers like TBZ Ltd (7.5x). Looking at the growth potential in the company we anticipate listing gains and give a ‘SUBSCRIBE’ rating to Kalyan Jewellers India Ltd IPO.

The company also raised Rs 352 crore from its anchor book subscription ahead of the IPO, allocating 40,448,275 equity shares to 15 anchor investors and at the upper price band of ₹87 per equity share. Some of the marquee anchor investors include Government Of Singapore Sundaram MF, HDFC Life Insurance Company Limited, Calypso Global Investment Fund, Segantii India Mauritius, Kuber India Fund, Moon Capital Trading PTE. Ltd, Edelweiss Crossover Opportunities Fund (Series-II), Baroda Large & Mid-Cap Fund, BNP Paribas Arbitrage – ODI, Cohesion Mk Best Ideas Sub- Trust were part of the anchor allotment.

The Offer comprises initial public offering of Equity Shares of the Company aggregating up to ₹11,750 million, comprising (a) a fresh issue aggregating up to ₹8,000 million (“Fresh Issue”); and (b) an offer for sale aggregating up to ₹3,750 million, comprising offer for sale of Equity Shares aggregating up to ₹1,250 million by T.S. Kalyanaraman (“Promoter Selling Shareholder”) and offer for sale of Equity Shares aggregating up to ₹2,500 million by Highdell Investment Ltd (“Investor Selling Shareholder” and together with the Promoter Selling Shareholder, the “Selling Shareholders”).

The Offer includes a reservation aggregating up to ₹20 million, for subscription by Eligible Employees (the “Employee Reservation Portion”). The Offer less the Employee Reservation Portion is hereinafter referred to as the “Net Offer”. Bids can be made for a minimum of 172 Equity Shares and in multiples of 172 Equity Shares thereafter.

Axis Capital Limited, Citigroup Global Markets India Private Limited, ICICI Securities Limited and SBI Capital Markets Limited are the Global Co-ordinators and Book Running Lead Managers to the Offer. BOB Capital Markets Limited is the Book Running Lead Manager to the Offer.