26 Mar , 2021 By : kanchan joshi
MUMBAI: Shares of Kalyan Jewellers India Ltd made a tepid stock market debut on Friday, with shares listing at 15% discount to its issue price.
At 10:05am, the scrip traded at Rs77.30 apiece, down 11.15% from its issue price of Rs87. The stock had listed at Rs73.90 on the BSE, and so far today has touched a high and a low of Rs78.55 and Rs73 respectively.
Kalyan Jewellers initial public offer (IPO) was subscribed 2.61 times on the last day of subscription on Thursday.
Analyst said the poor listing was due to heightened volatility in equity markets and expensively valued recent IPOs despite poor performance on the financial front.
Also, listed companies in the past six months have seen their stock prices correct 20-30% from its peak. This is hurting the sentiment of companies that are waiting to launch its IPO in next few months, analysts said.
Easy Trip Planner had also seen poor listing, and is currently trading below its issue price. Anupam Rasayan had listed at a 7% discount on Wednesday while Craftsman Automation also made a tepid listing.
"The IPO is valued at 58.4x of FY20 EPS, which looks to be reasonably priced. We believe the organized players in jewellery segment should get healthy traction in the coming years due to increased preference for branded jewellery. Further, Kalyan Jewellers focus on increasing revenue contribution from high-margin studded jewellery is expected to improve its overall margin. This along with continued addition of new showrooms is expected to ensure a sustainable growth for KJIL in the long-run", said Reliance Securities in a note to its investors.
The Rs1,175 crore IPO of Kalyan Jewellers, backed by Warburg Pincus, saw stake sale by existing shareholders and issue of new shares
The IPO, with a price band of Rs86-87 per share, opened on 16 March and closed on 18 March.
The company raised Rs800 crore by selling new shares for working capital requirements. Promoters and shareholders sold shares totalling Rs375 crore. Promoter T.S. Kalyanaraman sold shares worth Rs125 crore, while Warburg Pincus entity Highdell Investment Ltd sold shares worth Rs250 crore. At present, Kalyanaraman and Highdell hold 27.41% and 24%, respectively, in Kalyan Jewellers.
Kalyan Jewellers designs, manufactures, and sells a wide range of gold, studded, and other jewellery products for special occasions and daily wear.
Axis Capital, Citigroup Global Markets India, ICICI Securities, and SBI Capital Markets were the global coordinators and book running lead managers to the offer.
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