One of the biggest jewellery companies in India, Kalyan Jewellers India, saw its shares soar 8.3% in early morning trading to hit ₹589.45 a share, after news broke of five sizable block deals for ₹3,585 crore on August 22.
An estimated 6.6 crore shares, or 6.4% of the jewellery company, were reportedly swapped today at a floor price of ₹539 per share. Trikkur Sitarama Iyer Kalyanaraman, the company’s promoter, is probably the one to whom Highdell Investment sold a portion of its ownership.
Investors were notified by Kalyan Jewellers on Wednesday that Highdell Investment Ltd. and the promoter of Kalyan Jewellers India Limited entered a Share Purchase Agreement (SPA) on August 21, 2024. As per the terms of the SPA, Highdell would sell the promoter 24,299,066 equity shares, or 2.36% of the total share capital of the firm, for ₹1,300 crore, or a purchase price of ₹535 per share.
The promoter and promoter group will own 62.95% more shares in Kalyan Jewellers after the deal, up from 60.59%. Highdell Investment’s ownership of the company dropped sharply to 9.17% at the end of Q1 FY25 from 17.59% during the same period in the previous fiscal year.
The company posted impressive results for the quarter that ended in June, with consolidated revenue from operations increasing 29% year over year to ₹468 crore. Additionally, consolidated net profit increased by 28% from the previous year to ₹165 crore.
The rate of new client acquisition stayed high, making up more than 35% of the total. The business grew by opening 13 additional showrooms in India in Q1 FY25. In the South, same-store sales growth (SSG) was 13%, while in non-Southern regions, it was 11%. With a studded share rising to over 30% from 29% YoY, the growth in studded jewellery outpaced that of gold.
With a robust network of more than 217 locations throughout India, the company is among the biggest retailers of jewellery in that nation. Even in the more recent markets, the corporation initially concentrated more on building its brand recognition through company-owned outlets. Following its success, it adopted a franchise model in 2023 and grew to 76 locations by FY24.
Through a franchise model, the company is opening 80 new outlets in FY25, further leveraging its brand as it expands throughout Indian regions. Over the next two years, the asset-light growth is expected to produce enough cash flows to pay off its ₹6 billion debt in India, according to experts. The stock of the company has increased 440% in the last 15 months.
Motilal Oswal, a local brokerage firm, began covering the stock in June, with a target price of ₹525 per share. The brokerage is upbeat about the jewellery industry because it thinks customers are gravitating more and more toward established firms.
The organized jewellery sector held a 20–22% portion of the jewellery business, which was estimated to be worth USD 48–50 billion in FY18. The organized market recorded a CAGR of more than 17% between FY18 and FY24, compared to a CAGR of 9–10% for the whole market. The industry has shown exceptional growth over the last three years, with organized and overall market segments seeing value increases of 20% to 30%.
