Kalyan Jewellers Lists At 15% Discount On Stock Market Debut

Shares of Kalyan Jewellers Ltd. fell on market debut after the Rs 1,175-crore maiden offer of India’s second-largest jewellery maker received a tepid response from investors.

The stock listed at a 15% discount to its issue price of Rs 87 apiece on the bourses. The shares began trading at Rs 73.9 apiece before falling to a low of Rs 72.9, down as much as 16.2% in early trade on Friday. Kalyan Jewellers, along with Suryoday Small Finance Bank, shares the third slot for debuting at a discount after Indian Railways Finance Corp. and Anupam Rasayan Ltd. so far in 2021.

The Warburg Pincus-backed jeweller’s issue was subscribed 2.64 times—one of the least subscribed IPOs so far this year. The issue, priced at Rs 86-87 apiece, received bids for more than 35.64 crore shares at the upper end of the price band compared to 13.50 crore shares on offer.

The company will use Rs 600 crore to fund working capital requirement and the rest for general corporate purposes.

It makes gold, studded and other jewellery for regular wear to special occasions such as weddings. Gold jewellery contributes nearly two-thirds of the revenue from operations.

The company is a hyperlocal jeweller with a ‘My Kalyan’ network of service centres around its showrooms. It employed 2,699 people at these centers for door-to-door and other direct marketing efforts within local communities to showcase the catalogue, enroll customers to make advance payments for buying gold in the future and drive traffic to its nearest showrooms.

The jeweller, which started its operations in Kerala, had 107 showrooms located across 21 states and union territories as of December. Of those outlets, 35 are in south India. It also has 30 stores in the Middle East.

As of December, 78.19% of the company’s revenue came from India, while the remaining 21.81% from the Middle East. The company’s 766 ‘My Kalyan’ grassroot stores contributed 21% to the revenue.