Kalyan Jewellers India Ltd. will sell shares at Rs 86-87 apiece in its initial public offer on March 16, joining the primary market rush that has continued into 2021.
Retail Presence
The jeweller, which started its operations in Kerala, had 107 showrooms located across 21 states and union territories as of December. 35 of those outlets are in South India, while 30 are in the Middle East.
- As of December, 78.19% of the revenue came from India and the remaining 21.81% from the Middle East.
- The company has 766 'My Kalyan' grassroot stores which contributed 21% to the revenue.
Financials
According to its prospectus:
- Operations outside South India contributed 57.69% of its gross profit and 47.81% of its revenue in the financial year ended March 2020.
- Contribution stood at 49.92% of gross profit and 40.4% of revenue in the nine months ended December.
- 51.29% of Kalyan's FY20 revenue came from outside of tier-I cities. That rose to 53.08% in the nine months ended December.
- The company posted a loss of Rs 81.9 crore in April-December because of Covid-19. The company had availed moratorium to defer payments to certain loans.
The company has Rs 55.7 crore in long-term borrowings and Rs 2,635.5 crore in short term borrowings, including fund interest of Rs 30.8 crore on account of Covid-19 moratorium. Total debt, including metal gold loans, was Rs 3,667 crore as of December.
Competition
Kalyan Jewellers is the second-largest pan-India jewellery retailer, after Tanishq (Titan), in the country, according to Technopak. It also competes with regional players.
Risk Factors
- The coronavirus pandemic likely to have had a significant effect on operations, and negatively impacted business, revenues, financial condition and results of operations.
- May not be able to respond to consumer demand and market trends on time.
- Unable to maintain or establish arrangements with contract manufacturers and suppliers.
- Ownership of retail outlets in Middle East countries is subject to restrictions in the GCC countries.
- The current geographic concentration of operations creates an exposure to local economies, regional downturns and severe weather or other catastrophic occurrences. In 2018-19, the company operations were hit severely due to floods in Kerala which account for nearly 10% of the revenue.
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