Warburg buys Rs 1,200cr Kalyan Jewellers stake
Gets 10% In Biggest PE Deal In Jewellery Mfg
American private equity
giant Warburg Pincus is investing Rs 1,200 crore ($196 million) in
billionaire T S Kalyanaraman’s Kalyan Jewellers, marking the biggest
investment in the country’s jewellery manufacturing and distribution
sector. The investment gives Warburg Pincus — best known for hitting the
jackpot with its Bharti Airtel investment — a 10% stake and a board
seat in the Kerala-based company, which counts Bollywood stars Amitabh
Bachchan and Aishwarya Rai Bachchan as its brand ambassadors. The
funds will be used to open new stores outside Kalyan Jewellers’ key
south India market to tap the growing demand for gold ornaments, the
jeweller said in a statement. The over two-decade-old company has 55
stores in the country of which 40 are in the southern market. The four
southern states account for 45% of the total jewellery business in
India. Kalyan Jewellers also has six outlets abroad.
The company plans to add 100 new outlets in the western and northern regions of the country and international destinations including Kuwait, Qatar, Singapore and Malaysia in the next three years as it looks to boost revenues from the current Rs 10,000 crore to Rs 25,000 crore during this period.
Warburg’s investment will be the biggest private equity investment in Kerala, said Kalyan Jewellers, which is credited for bringing in transparency on making charges for jewellery in a highly competitive and unorganized market. Kalyanara man, who hails from a textiles business family and the first owner of a private jet in Kerala, started the jewellery business in the early ’90s with Rs 75 lakh and today his firm is a force to reckon with in the sector.
Gold demand in Asia’s third largest economy is expected to pick up as declining prices, fes tivals and weddings spur buying. India, the second biggest buyer of gold after China, consumes 25% of the global gold supply with a significant quantum of gold jewellery being bought for weddings.
In India, Warburg, which manages assets worth $39 billion globally , has investments in Lemontree Hotels and Metropolis.
The company plans to add 100 new outlets in the western and northern regions of the country and international destinations including Kuwait, Qatar, Singapore and Malaysia in the next three years as it looks to boost revenues from the current Rs 10,000 crore to Rs 25,000 crore during this period.
Warburg’s investment will be the biggest private equity investment in Kerala, said Kalyan Jewellers, which is credited for bringing in transparency on making charges for jewellery in a highly competitive and unorganized market. Kalyanara man, who hails from a textiles business family and the first owner of a private jet in Kerala, started the jewellery business in the early ’90s with Rs 75 lakh and today his firm is a force to reckon with in the sector.
Gold demand in Asia’s third largest economy is expected to pick up as declining prices, fes tivals and weddings spur buying. India, the second biggest buyer of gold after China, consumes 25% of the global gold supply with a significant quantum of gold jewellery being bought for weddings.
In India, Warburg, which manages assets worth $39 billion globally , has investments in Lemontree Hotels and Metropolis.
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