Kalyan Jewellers IPO Review – Should you Subscribe?
Kerala based Kalyan Jewellers IPO would open for subscription on 16th March, 2021. Kalyan Jewellers Kalyan Jewellers is one of largest Jewellery companies in India. Its gold jewellery business contributes to 75%, followed by studded stones (diamond and precious stones) and other Jewellery products. Should you invest in Kalyan Jewellers IPO? In this article we would provide Kalyan Jewellers IPO dates, IPO Price band, market lot, reasons to invest, risk factors, IPO Price valuations and final review whether one should invest or avoid.
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About Kalyan Jewellers India Limited
Kalyan Jewellers is one of the largest jewelry companies in India. Company was established by its founder and one of its Promoters, Mr. T.S. Kalyanaraman. They started jewellery business in 1993 with a single showroom in Thrissur, Kerala.
Kalyan Jewellers have since expanded to become pan India jewellery company with 107 showrooms across 21 states and union territories in India. They also have an international presence with 30 showrooms located in middle east.
Company design, manufacture and sell a wide range of gold, studded and other jewelry products. Company does this at various price points based on special occasions like weddings (which is the highest product category), jewellery for daily-wear, etc., Currently company sales of gold jewelry is 75% and studded Jewellery (diamonds and precious stones) contributing to 23% and balance 2% from other other jewellery products.
Kalyan Jewellers competitive strengths
1) One of the largest jewellery companies in India.
2) Trusted Jewellery brand
3) Strong network distribution with global outreach
4) Wide range of jewellery product offerings
5) Experienced promoters and managers
Kalyan Jewellers IPO Dates, Price Band and Issue Details
|IPO Opening Date||16-Mar-21|
|IPO Closing Date||18-Mar-21|
|Issue Type||Book Built Issue IPO|
|Face Value||Rs 10 per equity share|
|IPO Price band||Rs 86 to Rs 87 per equity share|
|Market Lot||172 Shares|
|Min Order Quantity||172 Shares|
|Listing at||BSE and NSE|
|Issue Size||Total Rs 1,175 Crores
i) Fresh issue – 800 Crores
ii) OFS – 375 Crores
Note: Kalyan Jewellers IPO Price Band is confirmed now, however the IPO size might change.
Objects of issue
Here are the objects of the IPO issue.
1) Offer for Sale (OFS) – In this, selling shares, holders would sell their shareholding and company would not get any proceeds from this issue.
2) Funding working capital requirements of the company and
3) General corporate purposes
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Who are the company promoters?
Mr. T.S. Kalyanaraman, Mr. T. K. Seetharam, and Mr. T. K. Ramesh are the promoters of the company.
Company Financial Performance
Here are the consolidated revenue and profit details in the last 3 years and 9 months.
|For the year / Period ending||Total Revenues (Rs in Millions)||Profits after tax
(Rs in Millions)
|9 Months ending Dec-20||55,497.9||-799.4||-1.4%|
Its EPS for FY2020 is Rs 1.49 and last 3 years average EPS is Rs 0.98.
Why to invest in this IPO?
Here are a few reasons to invest.
Kalyan Jewellers Kalyan Jewellers is one of largest Jewellery companies in India.
Risk Factors of investing in this IPO
1) Company revenues are on declining mode in the last 3 years and 9 months
2) Company has incurred losses in FY2019 and even for 9 months ending Dec-2020.
3) The strength of Kalyan jeweler brands is crucial for its success and in the future, it may not succeed in maintaining and develop such brands.
4) A recent outbreak of covid-19 have significant impact on its results and operations. This may continue in future too.
5) Company may not respond to changes in consumer demands and market trends in a timely manner which would have an impact on the operations of the company.
6) The company may be unable to maintain or establish arrangements with contract manufacturers or suppliers through whom they manufacture its products and procure raw materials and may experience disruptions in the operations of such parties.
7) Company ability to attract customers would depend on the success and visibility of its showrooms.
8) Its ownership structure in the Gulf Cooperation Council states may have foreign ownership restrictions and risks associated with shareholder arrangements with local shareholders.
9) Company practice is in line with other companies operating in the region, however they are not able to document annual shareholder and board meetings in some of the middle east countries in which they operation. This can pose a risk to its operations in the future.
10) For complete internal and external risk factors, you can refer the RHP of the company
Kalyan Jewellers IPO Dates / Time Table / IPO Schedule
|Finalization of Allotment||23-Mar-21|
|Initiation of Refunds||24-Mar-21|
|Credit to Demat Account||25-Mar-21|
|IPO Shares Listing Date||26-Mar-21|
How to apply this IPO?
You can login to your demat account, visit IPO section and click on the IPO link of Kalyan Jewellers Limited. You can then enter minimum lot quantity and price band and then submit.
IPO Price Valuations
Kalyan Jewellers IPO Price band is Rs 86 to Rs 87.
1) On the upper price band of Rs 87 and EPS of Rs 1.49 for FY20, the P/E ratio works out to be 58x.
2) For the last 3 years average EPS of Rs 0.98, the P/E ratio is 89x.
3) We cannot annualize last 9 months EPS to check P/E, as it incurred losses.
4) Means, the company asking price of Rs 87 of the upper price band in the P/E range of 58x to 88x.
5) There is only one listed peer which is Titan Company, which is trading at P/E 84x. Hence Kalyan Jewellers share price of Rs 87 is fully priced.
Kalyan Jewellers IPO GMP
Grey Market Price (GMP) of this IPO is not available and would be updated soon.
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Kalyan Jewellers IPO Review – Should you invest?
Kalyan Jewellers India Limited is one of largest Jewellery companies in India. Kalyan Jewellers has a significant offline presence in India.
Company revenues are fluctuating and declining.
It has incurred losses for FY2019 and for 9 months ended Dec-2020.
Kalyan Jewellers IPO price is fully priced.
I would recommend investors to avoid this IPO considering all these negative factors. I would not get surprised if investors would still apply for this IPO in this bull run.
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