Billionaire Indian Jeweler's Growth Plan Gets Push From Warburg

(Bloomberg) -- Warburg Pincus LLC is boosting its investment in billionaire T.S. Kalyanaraman's Kalyan Jewellers Ltd. to total 17 billion rupees ($262 million) as the Indian company plans to double it stores globally.

The jewelry manufacturer and distributor, based in the Indian state of Kerala, will increase the number of stores it operates to 200 over the next three years including entering the new markets of Saudi Arabia, Bahrain, Oman, Singapore and Malaysia, it said in an emailed statement on Monday. Kalyan didn't say how much of the company will be owned by Warburg after this round of investment.

India is the second-biggest consumer of gold in the world and demand is expected to recover this year, after slumping in 2016, as a cash crunch felt late last year eases and prices remain stable. Warburg's previous investment of 12 billion rupees in the company in 2014 was the biggest by a private equity firm in the jewelry manufacturing sector in India and Kalyan has delivered on its promise to boost stores to 100 by 2016.

“Warburg Pincus' additional investment will be used to accelerate the company's growth efforts in network expansion and pursuing acquisition opportunities,” Vishal Mahadevia, managing director, Warburg Pincus India Pvt. said in the statement.

In India, Kalyan plans to expand its presence to Uttar Pradesh and Madhya Pradesh while building on stores in Mumbai, Delhi, West Bengal, Rajasthan, Odisha and the southern states. The company is also planning an e-commerce platform and has initiated the process of converting its 630 customer service outlets into mini diamond stores to tap into demand for diamond jewelry, according to the statement.

To contact the reporter on this story: Swansy Afonso in Mumbai at safonso2@bloomberg.net.

To contact the editors responsible for this story: Jason Rogers at jrogers73@bloomberg.net, Candice Zachariahs, Arijit Ghosh