Kerala-based jewellery manufacturing and marketing firm Kalyan Jewellers has raised Rs 1,200 crore from Private Equity firm Warburg Pincus.
The investment is said to be the largest in the jewellery manufacturing and distribution industry space. The investment will support company's proposed retail and manufacturing expansion plans.
Speaking to Business Standard T S Kalyanaraman, chairman and managing director, Kalyan Jewellers said the company is planning to open around 28 stores, including 12 in overseas, of which 16 will come up before December 2014, while the balance will come in another six months.
The company is planning to scale up its global presence in the Middle East, by foraying into Kuwait and Qatar and in South East Asia, by entering into Singapore and Malaysia. The company currently got six exclusive outlets in United Arab Emirates.
While the retail the expansion, which would cost around Rs 1000-1200 crore, will be funded from the money raised from Warburg Pincus, the company is also planning to invest around Rs 300-400 crore in the manufacturing capacity, which will support company's retail expansion. The investment in manufacturing will be funded through its internal resources.
While, Kalyanaraman refused to disclose how much the company has diluted for Warburg Pincus, industry sources said that the diluting could be around 10-12%.
He added, the company would open around 25 stores every year. By 2016, the company has set a target of 100 showrooms.
"We look forward to working with Warburg Pincus as we continue to build on our foundation and move onto our next phase of growth,” he added.
The company has set a target to close the current fiscal with a turnover of around Rs 10,000 crore, as compared to Rs 8,000 crore last year. “In the next three years, our revenue will reach around Rs 25,000 crore,” said Kalyanaraman.
He claimed that this is the largest Private Equity investment into the state of Kerala so far. To a question on whether the company is planning for an IPO, he said, “currently we have enough funds, if we feel we need more money, then we will look into it”.
Vishal Mahadevia, managing director and Co-head India, Warburg Pincus, said, Warburg Pincus’ investment in Kalyan Jewellers is the largest private equity investment into the jewellery industry in India, and is an acknowledgment of the company's highly-talented team, its pioneering role within the industry.
Founded in 1993 and Headquartered in Thrissur, Kerala, Kalyan Jewellers is the flagship of 100-year old Kalyan Group which was started with textile manufacturing and retailing business.
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