• Kalyan Jewellers is amongst the most prominent jewellery companies with a pan-India presence
• Founded in 1993, the company operates with 107 showrooms located across 21 states and union territories in India and operates 30 stores in the Middle East
• The company designs, manufactures, and sells a wide range of gold, studded and other jewellery products
• Sale of gold jewellery is the most significant revenue stream contributing to 3/4^th of the total revenues of the company
• To operate as a hyperlocal jewellery store is one of the biggest strengths. Here the company engages with local artisans to manufacture jewellery to suit to local tastes and curate a localized product
• The company provides dedicated and localized services under the “My Kalyan” neighbourhood stores concept. These centres engage in door-to-door and other direct marketing efforts within the local communities

Kalyan Jewellers IPO opens for subscription between March 16 to March 18, 2021. Hyperlocal approach, strong presence and legacy in the jewellery business, being observed as a trusted brand are a few of the strong positives that work in favour of the company, however, financials are a drag.

Kalyan jewellers began operations in 1993 with a single store in Kerala. The company operates 137 stores in India and the Middle East as of the end of December 2020. It also sells jewellery through the online platform www.candere.com.

Kalyan offers various products across price points and special occasions, such as weddings, the highest-selling product category.

Product profile and brands

Kalyan Jewellers offer a wide range of products that includes jewellery for special occasions, such as weddings, to daily-wear jewellery. Also, the company caters to a vast range of price points. Kalyan has numerous sub-brands that address specific customer niches like:

1. Ornate wedding jewellery sold under the ‘Muhurat’ brand
2. High volume and mass-market jewellery sold under ‘Aishwaryam’ brand for value-conscious customers
3. Antique and heritage gold jewellery sold under ‘Mudhra’, ‘Sankalp’, ‘Nimah’ and ‘Anokhi’ brands addressing needs of mid-high end customers
4. Technology savvy customers served through online platform (www.candere.com)

Growth milestones

A brief history of Kalyan’s growth over the years:

Phase I – Establishment phase (1993 – 2003)

• Focus on brand building
• Forming a loyal customer base

Phase II – Growth phase in South India (2004 – 2011)

• Expanded showrooms across south Indian states
• Focus on selling plain gold jewellery to customers

Phase III – Pan-India growth and investment phase (2012 till present)

• Significant investments in marketing and brand building
• Geographical expansion
• Institutionalized a strong management team and board of directors
• Focussed on being a pan-India hyperlocal jeweller
• Expanded product-mix
• Diversified distribution channels

About the promoters of Kalyan Jewellers

Mr T.S. Kalyanaraman founded the business in 1993 with a single showroom in Thrissur, Kerala. Out of the 45 years of retail experience, 25 years of experience is in the jewellery industry. Mr T.K. Seetharam and Mr T.K. Ramesh, director-promoters of the company, have been associated since the inception and focus on business development.

Financial Profile

Below is the condensed financial information of Kalyan Jewelers India Limited.

Amounts in Rs Cr excluding per share data

• The company compares itself with the only listed peer Titan which had revenues of Rs 21,204 Cr for Fiscal 2020 and traded at a PE multiple of 84.2x

Offer proceeds

 Utilization of proceeds from the fresh issue of shares:

• Funding the working capital requirements
• General corporate expenses

IPO Factsheet

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The information provided in the red herring prospectus filed by the company with the Securities and Exchange Board of India (www.sebi.gov.in) is the basis for this note. However, I recommend that the reader validate the data before making any financial decision. Also, investment in an initial public offering (IPO) is subject to market risks. It should be evaluated, keeping your risk profile and investment objective in mind. The author will not be responsible for any financial loss or otherwise resulting from any action taken based on the above.

The author is a senior finance professional with over fifteen years of work experience in corporate finance and has an affinity for personal finance and investment management. Please leave your comment or share thoughts on this article via email at decodefinance.in@gmail.com. For more articles, please visit the website www.decodefinance.in

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