Following news of five major block deals totaling ₹3,585 crore on August 22, shares of Kalyan Jewelers India, which is one of India’s leading jewelry companies, jumped by 8.3% in early morning trade, reaching ₹589.45 per share. A 6.4% shareholding in the jewelry company, or about 6.6 crore shares, were reportedly exchanged today at ₹539 each, which is the floor price. It’s probable that Highdell Investment sold Trikkur Sitarama Iyer Kalyanaraman, the company’s promoter, a portion of its ownership.
The Company Posted Impressive Results
Investors were notified by Kalyan Jewelers on Wednesday that Highdell Investment Ltd. & the promoter of Kalyan Jewelers 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 value of ₹535 per share. The promoter & promoter group will own 62.95% more shares in Kalyan Jewelers 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 financial year.
The company posted impressive results for the quarter that ended in June, with consolidated revenue through 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 acquisitions stayed high, making up more than 35% of the aggregate. The business grew by opening 13 additional showrooms in India in Q1 FY25. In the South, same-store sales growth (SSSG) was 13%, while in non-Southern regions, it was 11%. With the studded share rising to over 30% from 29% YoY, the surge in studded jewelry outpaced that of gold.
The Industry Has Shown Exceptional Growth
With a robust network of more than 217 locations throughout India, the company is among the biggest retailers of jewelry 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 benefiting its brand as it expands throughout Indian regions. Over the upcoming 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 value of ₹525 per share. The brokerage is upbeat about the jewelry industry because it thinks customers are gravitating more and more toward established firms. The organized jewelry sector held a 20–22% portion of the jewelry 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%.
