Kalyan Jewellers plans IPO to fund MidEast growth

Indian firm invested $187m in 2014 to help the jeweller enter new markets Saudi Arabia, Bahrain, Oman, Singapore and Malaysia.
Kalyan has recruited Arab designers to create its own line, Ameera (pictured) – Arabic for princess.
By Bloomberg
Wed 17 May 2017 03:01 PM

Kalyan Jewellers India Ltd, the company giving away
Volkswagen AG’s Audi cars as freebies to lure customers, is exploring an
initial public offering within the next two years as the company seeks to raise
funds to expand its global footprint.

“You will hear of an IPO soon - we won’t have to wait too
long,” T.S. Kalyanaraman, chairman of the Thrissur, Kerala-based company, said
in a phone interview.

A possible share sale could happen between 2018 and 2019,
he said.

Kalyan, which counts Bollywood superstar Amitabh Bachchan
as a brand ambassador, last month won additional investment from private equity
firm Warburg Pincus LLC as the jeweler looks to double its stores to 200 over
the next three years.

Warburg invested 5 billion rupees ($78 million), adding
to the 12 billion rupees ($187m) it invested in 2014, to help the jeweller
enter new markets Saudi Arabia, Bahrain, Oman, Singapore and Malaysia.

“We wanted an investor like Warburg, who has a very good
reputation in the community, to come and join hands with us to add more
professionalism and to get more expertise,” Kalyanaraman said.

 

Kalyan plans to spend 8 billion rupees ($125m) in the current
financial year started April 1 to open 22 more stores this year in India and the
Middle East, taking the total number of outlets to 127, he said.

The new
stores, in addition to estimated growth of as much as 8 percent at existing
branches, may boost the company’s revenues by 15 percent this fiscal from 98.3
billion rupees ($1.5bn) last year, Kalyanaraman said.

“We are very positive on demand,” he said. Prime Minister
Narendra Modi’s move to withdraw high-denomination currency notes last year to
crack-down on blackmarket cash will only help organised players like Kalyan, he
said.

“There is no difference in the customer purchase pattern and the only
difference is the mode of payment to credit cards and debit cards from cash.”

Indian purchases have been recovering, with the World
Gold Council estimating annual consumption to be at the higher end of 650
metric tons to 750 tons in 2017.

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