Mumbai: Dalal Street is upbeat on news of a new Gold stock that could hit markets soon.
With Gold prices surging to unthinkable levels, the news of Kerala based Kalyan Jewellers' probable IPO sounds music to the average gold investor. The retailer with over 135 showrooms and 750 mykalyan stores across India may file a prospectus with securities regulator SEBI for an IPO sometime during September.
Post Covid, stocks related to Gold and jewellery business such as PC Jewellers, Vaibhav Global, Rajesh Exports, and Titan have gained investors attention. Stocks of Titan have gained by over 40 percent in the past five months - zooming from Rs 750 during March 2020 to a high of Rs 1,050 in July.
A Moneycontrol report with inputs from anonymous analysts said the IPO could be valued at Rs 1,600 - 1,800 crores.
Kalyan jewellers had to defer plans of an IPO in 2018 but was confident of pulling an IPO in current times owing to a "healthy normalcy" in the jewellery sector.
The report also quotes a source as saying that the company estimated a growth of 35 percent with its online businesses and a normalcy in wedding business.
"Axis Capital, Citi, ICICI Securities and SBI Capital are the investment banks working on the IPO for Kalyan Jewellers," said the report.
The IPO could see private-equity investor Warburg Pincus paring a part of its holdings from Kalyan jewellers. Warburg Pincus's total investment in Kalyan is estimated at Rs 1,700 crores and a 2019 ICRA report pegs this investment at 30 percent of a stake in the jewellery firm. The report further estimated Kalyan Jewellers' operating income at Rs 7,454 crores and a profit after tax of Rs 50 crores for FY19.
The exact timeline of the IPO is yet to be ascertained, however, the prospects of a listing of a prominent jeweller is likely to enthuse other players such as Senco, JoyAlukkas, or Malabar gold and diamonds in taking the IPO route.