Tag: kalyan jewellers

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Market News Top 10 News

HPCL to Acquire SP Group’s Stake in Gujarat LNG Terminal JV – Top Indian Market News

HPCL to acquire SP Group’s share in Gujarat LNG terminal JV

Hindustan Petroleum Corporation Ltd (HPCL) has entered into a share purchase agreement with SP Ports Private Ltd (SPPPL) to acquire a 50% stake in its joint venture (JV)— HPCL Shapoorji Energy Private Ltd (HSEPL). HSEPL is in the course of developing a 5 million metric tonne per annum (MMTPA) LNG re-gasification terminal at Chhara, Gujarat. The acquisition is likely to be concluded by March 31, 2021. SPPPL is a unit of the Mumbai-based Shapoorji Pallonji Group.

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Biocon Pharma partners with Libbs Farmaceutica to launch generic drugs in Brazil

Biocon Pharma, a wholly-owned subsidiary of Biocon Ltd, has partnered with Libbs Farmaceutica to launch generic drugs in Brazil. This partnership marks the entry of Biocon’s generic formulations into Latin America. As part of the out-licensing deal with Libbs, Biocon Pharma would be responsible for drug development and manufacturing. Libbs Farmaceutica would leverage its deep expertise and reach in Brazil to import, distribute, and market Biocon’s generic drugs. 

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Dr Reddy’s expects Sputnik V vaccine to get approval from Indian regulator in next few weeks

Dr Reddy’s Laboratories expects the Sputnik V Covid-19 vaccine to get approval from the Indian drugs regulator in the next few weeks. A top company official said that Sputnik V is a two-dose vaccine and must be taken within an interval of 21 days. The vaccine demonstrated an efficacy rate of 91.6%. Dr Reddy’s has partnered with the Russia Direct Investment Fund (RDIF) to launch the Sputnik V vaccine in India and other countries.

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Kalyan Jewellers to expand retail footprint by 13% 

Kalyan Jewellers has unveiled plans to expand its retail footprint in India by 13% in the first quarter (Q1 FY22). The company plans to enhance operations across seven states and add 14 new showrooms on April 24, 2021. While the brand has plans to scale up existing operations in Tier-1 cities, it will also focus on Tier-2 and Tier-3 markets with mid-sized showrooms. Kalyan Jewellers had recently raised Rs 1,175 crore through an IPO, and most of the proceeds will be utilised for the enhancement of working capital. 

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Domestic fuel rates expected to fall as Covid-19 dampens crude oil cost

A decline in global crude oil prices on Monday has given hope for a similar fall in domestic petroleum prices. The Brent Crude futures slipped to $63 levels a barrel, while the US crude traded lower. The fall in oil prices comes after a massive wave of Covid-19 infections continued to impact large parts of Europe. As a result, global fears have led to a slowdown in economic recovery. As per reports, the rupee is also expected to depreciate due to rising cases and a fall in the equity market.

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Coal India’s production likely to fall for second consecutive year: Report

As per a report from BloombergQuint, Coal India Limited (CIL) is likely to post a marginal decline in output in the financial year 2020-21, as production dropped below 600 million tonnes last year. This is the second consecutive year that the company will show a contraction. CIL had a production target of 660 million tonnes and was expecting to hit 630-640 million tonnes by mid-year. The impact of the Covid-19 pandemic has been a major factor behind lower demand. 

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IHCL’s Taj Hotel in Rishikesh closed for three days after 76 people test Covid-19 positive

A Taj Hotel of Indian Hotels Company Ltd (IHCL) in Rishikesh has been shut for three days after 76 people were found to be infected with Covid-19 at the premises. The hotel was sanitised and has been closed as a precautionary measure. The hotel was earlier closed for 48 hours after 16 of its staff tested positive for Covid-19 in a day on Thursday. The Covid cases in Uttarakhand have been showing a rising trend over the past few weeks.

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Ramco Industries increases stake in Lynk Logistics to 23.78%

Ramco Industries Limited has acquired 5.98 crore equity shares at Re 1 each in Lynk Logistics Limited. This takes Ramco’s shareholding in Lynk Logistics to 23.78%. Chennai-headquartered Lynk Logistics is a small & medium enterprise (SME)-focused delivery platform. It is a leading tech aggregator that provides logistics services for individuals and businesses.

Rane Holdings increases its stake in Rane (Madras) to 68.47%

Rane Holdings Limited announced that it has acquired 8.49 lakh equity shares (or 1.95% stake) at Rs 10 per share from its subsidiary, Rane (Madras) Ltd. The company’s overall shareholding in Rane (Madras) now stands at 68.47%. Rane (Madras) is a leading manufacturer of steering and suspension systems for the automobile industry.

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Market News Top 10 News

Cabinet Approves Proposal to Set Up Development Finance Institution – Top Indian Market News

Cabinet approves proposal to set up Development Finance Institution

The Union Cabinet, on Tuesday, approved the creation of a Development Finance Institution (DFI) for funding infrastructure and development activities in the country. The government will initially infuse Rs 20,000 crore into this institution. Finance Minister Nirmala Sitharaman said that the DFI is expected to raise up to Rs 3 lakh crore in the next few years. The DFI will start with 100% ownership of the Government of India. This figure will gradually be brought down to 26%.

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L&T secures multiple orders across business segments in domestic market

Larsen & Toubro (L&T) Limited has received multiple orders across its business segments in the domestic market. The company’s water and effluent treatment business has secured EPC (engineering, procurement, and construction) orders from the Rural Water Supply and Sanitation Department, Odisha. L&T’s buildings and factories business has secured an order from a leading cement manufacturer to construct a 10,000 TPD (tonnes per day) Integrated Cement Plant in Pali, Rajasthan. The value of the orders ranges between Rs 1,000 crore and Rs 2,500 crore.

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Godrej Properties raises Rs 3,750 crore via QIP

Godrej Properties Ltd has raised Rs 3,750 crore through a qualified institutional placement (QIP). The company’s board has issued 2.59 crore equity shares (of the face value of Rs 5 each) to eligible qualified institutional buyers (QIBs) at Rs 1,513.39 per share. Godrej Properties will utilise the funds to buy land and expand its business.

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GMM Pfaudler acquires assets of HDO Technologies

GMM Pfaudler announced that it has participated in the e-auction process for the sale of assets owned by HDO Technologies, which is currently under liquidation. The company has been declared as the successful bidder for assets including factory land, building, plant & machinery, office equipment, etc. A consideration of Rs 58.46 crore will be paid for the proposed assets. The tentative date for the completion of the transaction is April 30, 2021.

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TCS launches SaaS-based platform to secure enterprises from cyber risks

Tata Consultancy Services (TCS) has launched a software-as-a-service (SaaS)-based automated vulnerability remediation platform to protect enterprises from cyber attacks. The platform will identify and prioritise vulnerabilities in the software libraries of enterprises and proactively fix them. It provides risk-based analytics that helps security and IT operations teams to mitigate known risks.

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BEML receives orders worth $23 million from Bangladesh, Cameroon

State-owned BEML Limited has received export orders from Cameroon and Bangladesh under the Government of India- Lines of Credit. The company will supply 71 units of construction equipment consisting of bulldozers, excavators, motor graders, etc to the Ministry of Economy-Planning & Regional Development, Cameroon. It will also supply equipment for road construction and infrastructure projects to the Ministry of Roads & Highways Department, Bangladesh. The total value of the orders is estimated at $23 million (~Rs 167 crore)  

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HG Infra Engineering secures order from NTPC

HG Infra Engineering Ltd has received an order worth Rs 122.38 crore from state-owned NTPC Limited. The order is for the transportation of 26.41 lakh cubic metres of pond ash from NTPC Ramagundam to the NHAI-PIU-Mancherial road construction project. The project has to be completed within 15 months.

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Gland Pharma to supply 252 million doses of Sputnik V vaccine

Gland Pharma Limited has entered into an agreement with the Russian Direct Investment Fund (RDIF) to supply up to 252 million doses of Sputnik V Covid-19 vaccine. The company will utilise its Drug Substance and Drug Product facilities at its sites in Hyderabad. The production is expected to commence from the third quarter of 2021.

Read more here.

IPO Updates:

Kalyan Jewellers

The Rs 1,175-crore initial public offering (IPO) of Kalyan Jewellers was subscribed 60% on the first day of bidding. The portion reserved for retail investors was subscribed 1.10 times. The portion set aside for non-institutional investors (NIIs) saw a subscription of 20% and that of employees 1.15%. To know more about the IPO, click here.

Laxmi Organic Industries

The Rs 600-crore initial public offering (IPO) of Laxmi Organic Industries was subscribed 6.05 times on the second day of bidding. The portion reserved for retail investors was subscribed 10.38 times. The portion set aside for non-institutional investors (NIIs) saw a subscription of 2.48 times and that of qualified institutional buyers (QIBs) 1.15 times. You can learn more about the IPO here.

Craftsman Automation

The Rs 823.70-crore initial public offering (IPO) of Craftsman Automation was subscribed 1.26 times on the second day of bidding. The portion reserved for retail investors was subscribed 2.11 times. The portion set aside for non-institutional investors (NIIs) saw a subscription of 19% and that of QIBs 56%. To know more about the IPO, click here.

Anupam Rasayan India

The Rs 760-crore initial public offering (IPO) of Anupam Rasayan India was subscribed 44.06 times on the final day of bidding. The portion reserved for retail investors was subscribed 10.77 times and that of employees 1.71 times. The portion set aside for non-institutional investors (NIIs) saw a subscription of 97.42 times and that of QIBs 65.74 times. To know more about the IPO, click here.

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Editorial

Kalyan Jewellers IPO: All You Need to Know

kalyan jewellers ipo

One of the most awaited IPOs, especially amongst Keralites, has opened for subscription today— March 16, 2021. Kalyan Jewellers, which is part of one of the oldest business groups with a strong legacy in India, will soon go public. This IPO will be amongst four others that are hitting the markets this week. Let us have a detailed understanding of Kalyan Jewellers and its IPO.

Company Profile – Kalyan Jewellers

Kalyan Jewellers is one of the largest jewellery companies in India. It primarily designs, manufactures, and sells gold, studded, and other jewellery products for special occasions such as weddings and festivals. They offer a wide variety of traditional and contemporary jewellery designs in gold, diamond, and other precious metals. It opened its first showroom in Thrissur, Kerala in 1993. Since then, it has expanded rapidly and has established 107 showrooms across 21 states and union territories in India. The jewellery company has a strong presence in the Middle East with around 30 showrooms. Kalyan Jewellers also operates a network of 766 ‘My Kalyan’ stores (service centres) around the world. As of December 2020, nearly 78.19% of its revenue came from India, and the remaining 21.81% from the Middle East.

Graph showing the segment-wise revenue of the firm (as of December 31, 2020)

Over the years, Kalyan Jewellers has allocated a major part of its finances towards eye-catching advertisements or promotional activities. It has roped in a large number of prominent stars such as Amitabh Bachan, Katrina Kaif, Nagarjuna, and Manju Warrier, to name a few. These campaigns have played a vital role in driving sales growth.

The company’s strong growth and expansion can be attributed to the vision and efforts of the Kerala-based Kalyan Group. The jeweller is run by a set of experienced promoters and managers, headed by T.S. Kalyanaraman Iyer. It is also backed by one of the largest private equity firms in the world— Warburg Pincus. Kalyan Jewellers has established itself as the second-largest pan-India jeweller after Titan Company (Tanishq). 

About the IPO

Kalyan Jewellers had received approval from market regulator SEBI to float an initial public offering (IPO) in October 2020. The public issue will open on March 16, 2021, and close on March 18, 2021. The total issue size of the IPO is Rs 1,175 crore. This comprises a fresh issue of 9.19 crore equity shares aggregating up to Rs 800 crore. It also includes an offer for sale (OFS) of 4.31 crore equity shares (aggregating up to Rs 375 crore) by its promoters. The price band for the IPO has been fixed at Rs 86-87 per share.

Retail investors like you and I can bid for a minimum of 172 equity shares (1 lot), which will amount to Rs 14,964. The maximum number of shares that can be applied by an individual investor is 2,236 equity shares (or 13 lots). Thus, the maximum amount one can invest in the IPO is Rs 1,94,532. But take care not to apply for more than 1 lot, as your capital may get blocked for no reason if the IPO is oversubscribed.

Kalyan Jewellers will utilise the net proceeds from the IPO for two main purposes: 

  1. To finance the company’s working capital requirements. A sum of Rs 600 crore from the total proceeds will be allocated for the same.
  2. The remaining amount will be used to meet general corporate purposes.

The promoters, led by T.S Kalyanaraman and Highdell Investments Ltd, currently hold a 67.99% stake in the company. This figure will fall to 60.53% post the successful completion of the IPO. 

Financial Overview

.31 Dec 2020(FY 21)31 March 2020 (FY20)31 March 2019 (FY19)31 March 2018 (FY18)
Total Assets8,122.98,218.68,059.98,551.2
Total Revenue5,549.7910,1819,814.0210,580
Profit/Loss After Tax(79.94)142.27(4.86)140.9
(Values in Rs crore)

From the chart, it is clear that Kalyan Jewellers’ revenues have been fairly consistent/stable since 2018. However, it posted a net loss of Rs 4.8 crore in FY19. This can be attributed to the effect of the flash floods in 2018-19 in the southern regions of India (where the company has a strong foothold). It was able to return to a profit of Rs 142 crore in the next financial year. And now, the Covid-19 pandemic has severely impacted its overall operations and revenues in the current financial year. The company faced a one-time hit of Rs 40.2 crore for closing down showrooms in the Middle East (as they were making losses).

Over the past 3 years, the company’s revenue has grown at a CAGR of -2%. Earnings Before Interest and Tax (EBIT) has grown at a yearly rate of -0.9% during the same period. Total assets have remained in the range of Rs 8,000-crore levels. Thus, it is clear that Kalyan Jewellers is showing very sluggish (slow-paced) growth. Its Return on Net Worth (RoNW) is just 6.63%, which is very low compared to Titan Company’s RoNW of 22.38.

The company’s large debts are also a cause of concern. Currently, it has Rs 55.7 crore in long-term borrowings and Rs 2,635.5 crore in short-term borrowings. Total debt, including metal gold loans, stood at Rs 3,667 crore as of December 2020.

Risk Factors

  • The Covid-19 pandemic is likely to have caused a significant impact on the company’s business operations, revenues, and future results. Kalyan Jewellers had to temporarily close down its showrooms and ‘My Kalyan’ centres in India and the Middle East for a few months due to lockdown restrictions.
  • To a large extent, the company’s revenue and operations are impacted by global and domestic economic conditions. If there is a downturn in these factors (such as large fluctuations in gold prices), consumer spending on Kalyan’s products may be affected. 
  • The company may be unable to respond to changes in consumer demands and market trends in a timely manner. It is quite difficult to assess or predict the preferences of customers, which keeps changing rapidly.
  • Kalyan Jewellers may not be able to establish arrangements with contract manufacturers and suppliers. It may also experience supply-chain disruptions or quality control risks in the operations of such parties.
  • The current geographic concentration of Kalyan’s operations exposes it to regional economic downturns or natural disasters. For example, the company’s operations were severely hit in 2018-19 due to flash floods in Kerala. The Kerala market accounts for nearly 10% of the overall revenue. 
  • The ownership of retail outlets in Middle East countries is subject to restrictions of the Gulf Cooperation Council (GCC). 

IPO Details in a Nutshell

IPO DateMarch 16, 2021 – March 18, 2021
Issue TypeBook Built Issue IPO
Face ValueRs 10 per equity share
IPO PriceRs 86 to Rs 87 per equity share
Lot Size172 shares
Issue SizeAggregating up to 1,175 crore
Fresh Issue (goes to the company)Aggregating up to Rs 800 crore
Offer for Sale (goes to promoters)Aggregating up to Rs 375 crore
Listing DateMarch 26, 2021
Listing AtBSE, NSE

Axis Capital, Citigroup Global, ICICI Securities, SBI Capital Markets, and BOB Capital Markets have been appointed as the book-running lead managers to the public issue. Kalyan Jewellers had filed draft papers for its IPO in August 2020. You can read it here.

Conclusion

In the current scenario, Kalyan Jewellers is having a tough time improving its revenues. However, the power behind its brand and legacy is well-known by most of us. Over the years, the company has been able to cater to the needs of Indians and their never-ending love for buying gold. As always, do consider the risks associated with this company and come to your own conclusion. 

Before applying for Kalyan Jewellers’ IPO, I will personally wait to see if the portion reserved for institutional investors gets oversubscribed. Looking at the recent trend, most IPOs are providing a select few with amazing listing gains. Kalyan Jewellers’ IPO is most likely to attract significant investor participation as well.

What are your opinions on this IPO? Will you be applying for it? Let us know in the comments section.

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Prestige Estates Sells Assets Worth Rs 7,467 crore to Blackstone Group – Top Indian Market News

Prestige Estates sells assets worth Rs 7,467 crore to Blackstone Group

Prestige Estate Properties Ltd has sold assets worth Rs 7,467 crore to investment firm Blackstone Group as part of the first phase of a Rs 9,160 crore deal. Phase-1 of the transaction included the sale of 12 assets comprising of completed retail, office, and hotel properties. With the completion of this transaction, Prestige Estate’s net debt has reduced to Rs 997.5 crore (compared with Rs 8,464.5 crore as of December 31, 2020). Phase-2 of the transaction is expected to be completed by the end of the next quarter.

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Have adequate spectrum to be competitive in market: Vodafone Idea

P Balaji, Chief Regulatory and Corporate Affairs Officer of Vodafone Idea Ltd (VIL), said the company has an adequate spectrum to meet customers’ requirements and to be competitive in the market. He said that VIL had bid for just as much radiowaves as it needed to boost its services and coverage. This commentary comes after several reports stated that VIL may not have acquired large amounts of spectrum in the recent auctions due to financial constraints. Vodafone Idea’s spectrum holding after the recent auction stands at 1,768.60 MHz.

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Kalyan Jewellers IPO to open on March 16; price band fixed at Rs 86-87

Kalyan Jewellers, on Thursday, announced that it will open its initial public offering (IPO) on March 16. The price band of the IPO has been fixed at Rs 86 to Rs 87 per share. The offer size is Rs 1,175 crore, which comprises a fresh issue aggregating to Rs 800 crore and an offer for sale (OFS) of Rs 375 crore. The company will utilise the funds for meeting working capital requirements and for general corporate purposes. The issue will close on March 18.

Read more here.

JSW Steel’s crude steel production declines 1% YoY in February

JSW Steel Limited reported that its crude steel production declined by 1% year-on-year (YoY) to 13.06 lakh tonnes in February 2021. The average capacity utilisation was 93% last month. The production of flat-rolled products declined 6% YoY to 9.27 lakh tonnes. The production of long-rolled products increased by 10% YoY to 3.4 lakh tonnes during the same period.

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Infosys BPM extends strategic partnership with Newmont Corp

Infosys BPM announced a five-year extension of its strategic collaboration with the world’s largest gold mining company- Newmont Corporation. The company will standardise and digitise delivery models across Newmont’s mining sites. Infosys BPM will leverage its automation, artificial intelligence (AI), and design thinking capabilities to deliver increased value for Newmont. Infosys BPM is the business process management arm of Infosys Limited.

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SpiceJet to offer RT-PCR test for Rs 500 in Mumbai, Delhi

SpiceJet Limited has launched the country’s cheapest Covid RT-PCR testing facility for the general public at Rs 499 through its subsidiary, SpiceHealth. It will also offer the testing facilities at a special price of Rs 299 (which is one-third of the prevailing market rate) to its passengers. In the first phase, SpiceHealth will make its testing facility available in Mumbai and Delhi.

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NMDC declares interim dividend of Rs 7.76 per share

NMDC Limited’s board has approved an interim dividend of Rs 7.76 per share for the financial year 2020-21. The company has fixed March 23, 2021, as the record date for payment of the interim dividend. State-owned NMDC is India’s largest iron ore miner and produces about 35 metric tonnes (MT) of iron ore from its three iron ore complexes in the country.

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Ramco Systems goes live at Nigeria-based Caverton Helicopters

Ramco Systems Limited announced that it has gone live at Caverton Helicopters with its Aviation M&E MRO Suite V5.8, thereby integrating and digitally transforming its business processes. The installed Aviation Suite helps Caverton Helicopters to track transactions, generate flight contract billing, and execute work packages. Caverton Helicopters is a Nigerian aerospace company that serves the West African offshore oil and gas industry.

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Ares SSG Capital completes acquisition of Altico Capital

Hong Kong-based Ares SSG Funds has completed the acquisition of debt-ridden Altico Capital. This buyout marks the first resolution of a defaulting non-banking finance company (NBFC) outside India’s Insolvency and Bankruptcy Code (IBC). State Bank of India (SBI), Bank of Baroda, Yes Bank, ACRE ARC, and Aditya Birla Finance were the main lenders to Altico Capital that have credit exposure. 

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Firms of Rakesh Jhunjunwala, Samir Arora file for mutual fund licenses

Helios Capital Management and Alchemy Capital Management are among four investment firms that have applied for mutual fund licenses with market regulator SEBI within the past 4 months. Singapore-based Helios Capital is founded by Samir Arora, while Alchemy Capital is co-founded by ace investor Rakesh Jhunjunwala. Bajaj Finserv, Capitalmind (Wisemarkets Analytics), Frontline Capital Services, Unifi Capital, and Zerodha Broking are other firms that have applied for mutual fund licenses.

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USTPO grants patent to Newgen Software for invention of advanced binarization process

The United States Patent and Trademark Office (USTPO) has granted a patent to Newgen Software Technologies Ltd for an invention entitled “Image Processing System and Method”. The patent is for a period of 20 years, which starts from March 2018. The invention is an image processing system that binarizes images, which refers to converting colored and grey images to black and white images. The process of binarization is used to reduce image size and to facilitate document analysis.