Antique Stock Broking has recommended avoiding the Kalyan Jewellers initial public offering (IPO) because it believes the stock will be available at cheaper valuations. The Antique note said that the IPO valuation seems on the higher side in the short-term to medium-term.

Share Market Live

NSE

The Antique report stated: “We note that Kalyan Jewellers has faced headwinds in the past couple of years. In FY19, about 60 percent of the company’s revenues were impacted due to floods in south India, while the revenue for the quarter ending March 2020 was adversely impacted due to the COVID-led lockdowns.”

“Accordingly, the company’s revenues have been flat over the past three years with single-digit profitability. Going forward, we believe the company will perform better on the back of strong brand recall, increasing shift to organised jewellery and expansion in-store network,” states the Antique note.

The Kalyan Jewellers’ IPO opened on March 16. As of 5 pm on Day 1, the Rs 1,175-crore issue was subscribed 0.6 times or 60 percent. The IPO closes on March 18.

Kalyan Jewellers is the second-largest jeweller in India after Titan (Tanishq) with approximately 6 percent market share in the organised jewellery market. The company began its journey in 1993 with a single showroom in Kerala. Since then, it has expanded to become a pan-India retailer with 107 showrooms across the country, and 30 in the Middle East.

The company wants to expand its showroom network and diversify into various channels of distribution, widen its product offerings to increase consumer reach further, leverage upon ‘My Kalyan’ centre network to deepen customer outreach and strengthen distribution network in core markets.

(Edited by : Abhishek Jha)