Kalyan Jewellers India Ltd. IPO

IPO Details:

Price Band: 86-87

Cutoff Price: 87

About Company:

One of the largest jewellery companies in India based on revenue as of March 31, 2020, according to the Technopak Report. Established by founder and one of the Promoters, Mr. T.S. Kalyanaraman, who has over 45 years of retail experience, of which over 25 years is in the jewellery industry. We started our jewellery business in 1993 with a single showroom in Thrissur, Kerala.

Competitive Strengths:

1. Established brand built on the core values of trust and transparency

2. One of India’s largest jewellery companies with a pan-India presence

3. Hyperlocal strategy enabling us to cater to a wide range of geographies and customer segments

4. Extensive grassroots “My Kalyan” network with strong distribution capabilities enabling deep customer outreach

5. Visionary Promoters with strong leadership and a demonstrated track record supported by a highly experienced and accomplished senior management team and board of directors

6. Wide range of product offerings targeted at a diverse set of customers

7. Robust and effective internal control processes to support a growing organisation and showroom network with a pan-India presence

Strategies:

1. Leverage our scalable business model to expand our showroom network and diversify our channels of distribution

2. Widen our product offerings to further increase our consumer reach

3. Leverage “My Kalyan” network to deepen customer outreach and strengthen the distribution network in our core markets

4. Invest in CRM, marketing and analytics to more effectively target consumers and drive sales

Financial Performance:

Net Profits and EPS is quite volatile for such a large company and hardly any growth seen in revenues.

Objects of the Issue:

1. Offer for Sale

2. Fresh Issue: Funding working capital requirement of the company and general corporate purpose

Our view: With EPS of Rs 1.86, company cutoff price is valued at P/E of 46 and price to networth is 3.27. There are few listed companies also but we can't compare Kalyan Jewellers with them as those companies were involved in unethical practices. If we look at Titan Company that is also involved in same business then IPO is undervalued. Grey market premium is also not that attractive so I would avoid this IPO unless GMP rises. Reason to avoid is there are many IPO's lined up and we can go for that instead of blocking funds in this IPO.

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Grey Market Premium:

Subscription Details:

Allotment Status: Link

Listing Status:

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