The plan comes as gold purchases by Indians this year are forecast to plunge to a record low with the coronavirus
pandemic hurting the economy and pushing prices to all-time highs. Still, the Warburg Pincus LLC-backed jeweler is likely to benefit from the nearly 30% jump in gold prices
“While there are issues with demand, which may probably take a year or year-and-a-half to recover, at the end of the day the IPO will sail through because there is demand for an instrument or company which is a jewelry company,” according to Chirag Sheth, a consultant at Metals Focus Ltd. “At this moment, you really don’t have many big jewelry players in India and investors don’t have too many options to put their money in except couple of companies.
The market share of organised jewelers is less than third of the country’s retail sector, while standalone, smaller stores make for the rest, according to Kalyan Jewellers.
Started in 1993 by T.S. Kalyanaraman in Kerala, Kalyan has 107 stores in India and 30 showrooms in the Middle East. It competes with Titan Co., Tribhovandas Bhimji Zaveri
Ltd. and PC Jeweller Ltd., which are the biggest listed jewelry companies
in India currently.
“The share sale could see a lot of interest as physical gold and silver continue to appeal to investors,” said Abhimanyu Sofat, head of research at IIFL Securities Ltd. “There is also a huge divergence in the valuation among listed companies
in this space, which provides Kalyan Jewellers
an opportunity to acquire a sweet spot in the middle with its large retail presence and brand popularity.”