Kalyan Jewellers IPO is getting launched for subscription on Tuesday 16, March 2021, and will be available for subscription till Thursday, March 18, 2021. The company is looking to raise Rs.1175 crore through public issue in an Offer for Sale of 938,099,035 lakh Equity Shares, Ahead of the IPO, the Kalyan Jewellers has already raised Rs 352 crore from 15 anchor investors.
The company has decided to allocate 4,04,48,275 shares at Rs 87 per piece to 15 anchor investors which includes the Government of Singapore, Monetary Authority of Singapore, HDFC Life Insurance Co Ltd, and BNP Paribas Arbitrage.
The equity shares of Kalyan Jewellers IPO are proposed to be listed on both BSE and NSE.
The Kalyan Jewellers IPO issue will be sold in the price band of Rs. 86-87 per share and the minimum lot quantity is 172 shares and in multiples thereof translating to a minimum investment of Rs 14,964.
The latest Grey market premium price (GMP) for Kalyan Jewellers IPO’s were seen up by more than 14.50% and were trading around Rs.99 as of today, This means people are expecting it to open on listing day to be at least at Rs.100 or more.
Having said that, I would like to add here that many people underestimated Stovekraft IPO before it’s launch, however the share price made a high of Rs.545 above the pre-open IPO price band of Rs.384.
Likewise for HFFC (Home first finance) IPO, the GMP before launch was at about Rs.650 however the stock got listed at Rs.540 (This was Recommended by Famous Business news Anchor? ) on the other hand for IRFC IPO many people recommended a BUY and GMP were also seen at quite high range but unfortunately it open at a discount price and is currently trading at Rs.25.40.
There are many such examples of IPO’s doing just opposite of Grey market premium price. GMP does not mean in anyway a recommendation for an IPO, the financials of a company and its future prospectus tells a lot.
Here is the thing no one can tell you whether the IPO will going to make a stellar debut or not, it is you who have to decide based on available information about the company.
Moreover the IPO’s now a days are very hot market every one wants to earn some quick money on listing day itself and there is nothing wrong about it.
Having said that, one must not forget to check the financials and do not fall for any recommendation from anyone, it is you hard earned money, you should decide whether to opt for the IPO or not.
You may watch various YouTube channels or read on different websites about recommendation for stocks and IPO, it is my humble suggestion and request please do not ever fall prey to it. Better than this is to invest in ETF’s?.
Therefore, whenever you are buying IPO make sure the money invested is not the one which you my need it urgently, always use extra money which you may not require in near future, Otherwise stay away completely.
Now, coming back to the Kalyan Jewellers IPO let us talk about in brief about the company and its financials and other details step by step.
About Kalyan Jewellers India Limited (KJIL):
Kalyan Jewellers is one of the biggest jewellery chains in India. Kalyan Jewellers is the second-largest pan-India jewellery retailer, after Tanishq (Titan). The Company was originally formed as a sole proprietorship under the name of Kalyan Jewellers at Thrissur in 1993.
It was established by founder and one of Promoters, Mr. T.S. Kalyanaraman, who has over 45 years of retail experience, of which over 25 years is in the jewellery industry.
As of December 31, 2020, they had 7,230 employees employed across all subsidiaries and locations in India and the Middle East, of which 6,895 are employed in India and 335 are employed in the Middle East.
The company does have 107 showrooms across 21 states in India right now. In 2013, they also ventured into the Middle East. They have 30 showrooms abroad. All in all, the company rakes in revenues to the tune of 10,000 crores (FY20) and has been doing so rather consistently.
There have been no defaults, restructuring or rescheduling of borrowings availed by Company from financial institutions or banks.
Kalyan Jewellers National Brand Ambassadors includes Amitabh Bachchan, Katrina Kaif, Jaya Bachchan and Shweta Nanda Bachchan. Whereas Regional Brand Ambassadors are Prabhu Ganesan (Tamil), Nagarjuna Akkineni (Telugu), Shiva Rajkumar (Kannada), Manju Warrier (Malayalam).
The Indian jewellery retail sector’s size in Fiscal 2020 was approximately US$64 billion. The sector’s organized retail share stood at approximately 32%, comprised of national and regional players, while the rest of jewellery retail continues to be dominated by the unorganised segment, comprised of over 500,000 local goldsmiths and jewellers.
Let us now talk about financials aspects of Kalyan Jewellers India Limited in detail.
Financials Of Kalyan Jewellers India Limited (KJIL):
In Fiscal 2020 and in the nine months ended December 31, 2020, revenue from operations was ₹101,009.18 million and ₹55,167.04 million, of which 78.19% and 86.21% was from India and 21.81% and 13.79% was from the Middle East.
The company posted a loss of Rs 81.9 crore in April-December because of Covid-19. loans. The company has Rs 55.7 crore in long-term borrowings and Rs 2,635.5 crore in short term borrowings, including fund interest of Rs 30.8 crore on account of Covid-19 moratorium. Total debt, including metal gold loans, was Rs 3,667 cr.
Kalyan Jewellers reported a profit of Rs 142.27 crore for the year ended March 2020 against a loss of Rs 4.86 crore in the previous financial year and a profit of Rs 141 crore in FY18.
During the Financial Year 2019-20, the Company has registered net revenue from operations of Rs. 78,458.26 Million, as compared to Rs. 74,481.66 Million in the previous year on a standalone basis. Profit before Tax for the year under review was 2353.31 Million and Profit after Tax for the year under review was Rs. 1563.56 Million.
As you can see below how revenue growth hasn’t been great these past three years there’s a lot to be desired on this front.
As of December 31, 2020, they had ₹12,088.41 million of contingent liabilities, As per the Restated Consolidated Financial Information, they incurred a loss of ₹48.64 million in Fiscal 2019 and a loss of ₹799.48 million in the nine months ended December 31, 2020 on a consolidated basis.
They also had negative cash flows from operating activities of ₹2,281.16 million in the nine months ended December 31, 2020. While we recorded profits in both Fiscals 2018 and 2020.
As of the end of Fiscals 2020, 2019 and 2018 revenue from operations in South India, which includes Kerala, Tamil Nadu, Andhra Pradesh, Telangana, Pondicherry and Karnataka, represented 52.19%, 51.73% and 57.95% of total revenue from operations, respectively.
However, In recent years, their business has experienced significant growth. Revenue from operations increased by 3.38% to ₹101,009.18 million for Fiscal 2020 from ₹97,707.62 million for Fiscal 2019 primarily due to an increase in gold and studded jewellery sold by us.
Due to this total income increased by 3.74% to ₹101,810.16 million for Fiscal 2020 from ₹98,140.29 million for Fiscal 2019. Just to let you know EBITDA is defined as profit/loss before tax less other income before finance cost and depreciation and amortisation.
Profit/loss before tax margin is defined as profit/loss before tax divided by revenue from operations. EBITDA margin is defined as our EBITDA as a percentage of revenue from operations.
Kalyan Jewellers will join the listed peer Titan Company Ltd, which has a P/E of 84.23x, Also, the company’s asking price for the IPO translates to a P/E of 58 based on the numbers from FY 20.
Tanishq (Titan Company Limited) is the leader in the Indian Jewellery market with a 3.9% share of the overall jewellery market and a 12.5% share of the organized jewellery market, based on Fiscal 2019. For the same period, Kalyan Jewellers had a 1.8% share of the overall jewellery market and a 5.9% share of the organized jewellery market.
There are few multi-regional players such as Tribhovandas Bhimji Zaveri (TBZ), Malabar, Joyalukkas, PC Jeweller and Senco Gold, etc. which are largely focused in certain regions but have expanded and opened stores in other regions, although to a certain and limited degree.
Kalyan Jewellers India Peers Comparison:
The industry leader Titan’s jewellery business grew by 31%. Titan also had a higher operating margin (EBIT margin) at 12% compared with 5.2% for Kalyan. Titan’s return on equity (RoE) for FY20 was 24% while it was 6.6% for the latter. Looking above the IPO valuation seems to be on a higher side.
However, Kalyan is still a massive organized player. And their future prospects will ultimately depend on India’s appetite for gold, which by the way is very huge still and there are ample reason for the same.
Moreover, with moves like GST and Demonetization, people are now forced to transact transparently. The unorganized players don’t have an advantage like they used to. They are being forced to adapt or shut shop. So clearly, the industry favours the likes of Tanishq and Kalyan.
Currently, taxes on gold include customs duty of 12.5% and GST of 3%. However, in the recent budget of 2021, the government reduced the customs duty to 7.5% this simply means decrease in the cost of gold jewellery in India.
Kalyan Jewellers IPO Details:
Objects of the offer:
The company has proposed to utilise the net proceeds for funding working capital which stands around Rs 600 crore and for general corporate purposes.
The issue comprises fresh issue of equity shares worth Rs 800 crore and offer-for-sale (OFS) worth Rs 375 crore by promoters and shareholders. The OFS comprises selling up to Rs 125 crore worth shares by promoter TS Kalyanaraman, and Rs 250 crore by Highdell Investment Ltd.
50% of the issue will be reserved for the qualified institutional buyers (QIBs), 35% for retail investors and 15% for non-institutional investors.
Frequently Asked Question (FAQ):
1.What Is The Symbol For Kalyan Jewellers IPO?
Ans: The Symbol for Kalyan Jewellers India Limited is KALYAN
2.When Kalyan Jewellers IPO Coming?
Ans: The Issue Period for Kalyan Jewellers IPO is 16-Mar-2021 to 18-Mar-2021.
3. Post Modification Period For Kalyan Jewellers IPO?
Ans: The Post issue Modification Period for IPO is 19-Mar-2021 (10.00 A.M. to 11.00 A.M.).
4. What Is The Cut-off Time Period For UPI Mandate For Kalyan Jewellers IPO?
Ans: The Cut-off time for UPI Mandate Confirmation is 19-Mar-2021 (upto 12:00 PM).
5. What Is The Issue Type For Kalyan Jewellers IPO?
Ans: The Issue Type is 100% Book Building.
6.What Is The Price Band For Kalyan Jewellers IPO?
Ans: The Price (Band) Range for Kalyan Jewellers IPO is Rs.86 to Rs.87 per equity share.
7. What Is The Lot Size For Kalyan Jewellers IPO?
Ans: The Bid Lot i.e. Minimum Order Quantity (lot size) for Kalyan Jewellers IPO is of 172 Equity Shares and in multiples thereof 172 Equity Shares.
8. Who Are The Book Running Lead Managers For Kalyan Jewellers IPO?
Ans: The Book Running Lead Managers are, Axis Capital Limited, Citigroup Global Markets India Private Limited, ICICI Securities Limited, SBI Capital Markets Limited and BOB Capital Markets Limited
9. What Is The Face Value For Kalyan Jewellers IPO?
Ans: The Face Value is of Rs.10 whereas The Tick Size is of Rs.1
10. What Is The IPO Market Timings For Kalyan Jewellers IPO?
Ans: The IPO Market Timings is 10.00 a.m. to 5.00 p.m.
Apart from above points:
The Maximum Subscription Amount for Retail Investor is Rs. 2,00,000
The Maximum Subscription Amount for Employee is Rs. 5,00,000 (Rs.8 Discount Per equity share*)
The Name of the Registrar is Link Intime India Private Limited
The Contact person name number and Email id is Shanti Gopalkrishnan, +91 22 4918 6200, firstname.lastname@example.org
The Address of the Registrar is C101, 247 Park, L.B.S. Marg, Vikhroli (West), Mumbai – 400 083, Maharashtra
Where To Check Kalyan Jewellers IPO Application And Allotment Status?
As an investor or trader generally we are curious and anxious to know the results of the application as soon as possible. To ease the anxiety, both Bombay Stock Exchange (BSE) and National Stock Exchange (NSE) have come up with dedicated pages and links which investors can use.
The NSE has an IPO bid verification module. It can be used to verify the IPO application details uploaded on the exchange bidding system by your member/bank. The data of the bid details uploaded by the member/bank would be available on T+1 day (where T would be date receipt of bid on NSE platform).
In addition, the data would be available until six days after the issue closure date. This gives the investor enough time to verify the data and instruct the member/bank to make any changes, if required.
Exchange will also provide allotment information as provided by the registrar to the issue.
An investor can avail this facility by registering using his/her PAN details. After registration, the investor will receive an email notification from NSE on the registered email address. That email will provide the login details.
The following link can be used for the same:
The BSE has also come up with a similar platform.
This unique facility allows investors to verify the status of their application submitted to a Trading Member or a SCSB (Self-Certified Schedule Banks).
The investor can check his application status/information on the website until one week after issue close.
The following link can be used by investors:
Important Things To Keep In Mind Before Applying For IPO’s:
- Try to fill for the same IPO online from different DP ID i.e. if in your family have more than 1 account you can possibly get the allocation done in case of over subscription.
- You should have a good knowledge of the sector and the company you are planning to invest.
- Analysis of the company’s balance sheet is very crucial. A clear understanding of the company’s future projects and vision is very necessary to know whether it will have a sustainable future.
- Investment decision has to be taken carefully and not in a hurry.
- Read as much as you can about the company, its objectives for launching the IPO, its past history in business and its futures prospectus.
- Don’t go for hype in the news, your analysis should be based on facts rather than gossips and rumors.
- Many IPOs are oversubscribed. What this means is that the demand for shares is much higher than the shares available for sale. In such a situation, it is no surprise that many investors fail to get any shares allotted to them. This is why it is advisable to apply for IPO shares on the last day of bidding. This way, one can have a good estimate on how large the subscription will be. Also, in that case, one should bid for just one lot and not unnecessarily lock up their capital.
In the wake of the COVID-19 crisis, the demand for Fiscal 2021 is projected to drop by 37% and thereafter
estimated to bounce back and grow at an accelerated CAGR of 22% for the next four years. Within the jewellery
retail industry, the organized segment is expected to de-grow by 32% whereas the unorganized segment is
expected to de-grow at 40% in Fiscal 2021.
India is a market of approximately 10 million marriages annually and this market alone is estimated to cater to 300 to 400 tonnes of gold. The age profile of the country will continue to sustain the high growth of weddings in India to support this demand.
Gold jewellery also carries a strong symbolic association with wealth and prosperity in India that manifests in the form of purchasing gold jewellery during festivals and auspicious occasions such as, Akshaya Tritiya, Navratri/Durgapuja, Karva Chauth, Onam and Diwali Dhanteras, among others. Strong affinity of the Indian psyche towards gold jewellery over investment in bars and coins as a trend is expected to continue in the future.
Gold jewellery already carries an investment element which is favourably viewed by Indian households given their propensity to save.
The cultural association with gold jewellery in rural India is even more pronounced than in urban India. As a result, rural India accounts for 60% of gold jewellery demand in India, whereas its share in total retail expenditure is 50%. Farm output, commodity prices and farm incomes therefore have strong causation with jewellery/gold demand.
Let us now check some of the strength and risk associated with Kalyan Jewellers
Some of the qualitative factors and strengths of Kalyan Jewellers India Limited (KJIL)
- Established brand built on the core values of trust and transparency.
- One of India’s largest jewellery companies with a pan India presence.
- Hyperlocal strategy enabling to cater to a wide range of geographies and customer segments.
- Extensive grassroots “My Kalyan” network with strong distribution capabilities enabling deep customer outreach.
- Visionary Promoters with strong leadership and a demonstrated track record supported by a highly experienced and accomplished senior management team and board of directors.
- Wide range of product offerings targeted at a diverse set of customers.
- Robust and effective internal control processes to support a growing organisation and showroom network with a pan India presence.
Some of the Risk Factor for Kalyan Jewellers India Limited (KJIL)
- Company, Subsidiaries, Promoters and Directors are involved in certain legal proceedings and potential litigation. Any adverse decision in such proceedings may render them liable to liabilities/penalties and may adversely affect business and results of operations.
- Company income and sales are subject to seasonal fluctuations and lower income in a peak season may have a disproportionate effect on our results of operations.
- The ability to attract customers is dependent on the success and visibility of new showrooms
- The recent outbreak of the novel coronavirus could have a significant effect on results of operations, and could negatively impact business, revenues, financial condition and results of operations.
- If inflation rises in India, increased costs may result in a decline in profits
- Gold jewellery manufacturing suffers from poor infrastructure and informality. It is currently dominated by small manufacturers that do not have access to transport, vaulting and credit facilities. This makes the sector prone to a higher cost of business.
- Demand of gold and diamond jewellery is subjected to uncertainty with their prices governed by national and international events such as rate hike by United States Federal Reserve and demand from key markets, among others.
Therefore, it is always advisable to go through Kalyan IPO – RHP to know in detail about the company.
The only thing which should be bothering you is the research you did before applying for the IPO. Investing in IPO is risky as well as profitable. Having said that you also need to keep in mind important things mentioned above before applying to IPO’s as the risk is always involved.
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Note: Please do your own research and make investment. Moneycontain will not be responsible for any of your losses at all. The point made is for educational purpose only and intended to give information. All investments are subject to risks, which should be considered prior to making any investments. The above details are compiled from information available on public platforms. These are not buy or sell recommendations.