Warburg glitter for Kalyan Jewellers

Mumbai, Oct. 20: Private equity company Warburg Pincus has invested Rs 1,200 crore in Kalyan Jewellers, a Kerala-based jewellery manufacturing and distributing company, for an undisclosed stake.

This is one of the largest investments by a PE fund in a jewellery company.

Though the press statement did not comment on the amount of stake, it is understood to be up to 20 per cent.

Kalyan Jewellers will use the money to expand its network.

The Kalyan group, which was initially in the textile business, ventured into jewellery retailing in 1993 by opening its first store at Thrissur in Kerala.

It now has 55 outlets in South India, Maharashtra, Gujarat, the National Capital Region (NCR) and Punjab, along with six in the United Arab Emirates.

It plans to have 100 outlets by 2016 and add 28 stores in the next six months. Kalyan Jewellers, which offers gold, silver, diamond and platinum jewellery, is also planning to enter Kuwait, Qatar, Singapore and Malaysia.

The company said it was eyeing a revenue of Rs 20,000 crore, following which it might come out with an initial public offering (IPO). However, the company did not disclose any time frame to reach this target.

“Warburg Pincus’s investment in Kalyan Jewellers is the largest private equity investment into the jewellery industry in India, and is an acknowledgement of the company’s highly-talented team, its pioneering role within the industry, and its commitment to the highest levels of customer service,” Vishal Mahadevia, managing director and co-head India of Warburg Pincus, said.

Kalyan has a loyalty programme, which has 2 million members now. It has also introduced detailed price tags in the interest of transparency and BIS (Bureau of Indian standard) certification on gold jewellery.

The overall deal activity in the country grew 22 per cent in the first nine months of the year to $36.2 billion with the total number of deals at 886, according to a Grant Thornton report.