Highdell Sells 2.36% Stake in Kalyan Jewellers: What’s Happening

Kalyan Jewellers India Ltd. designs, makes, and sells a wide range of gold, diamond, and other jewelry at various price points. As of today, it’s one of the biggest jewelry retailers in India by revenue. The company was founded by Mr. T.S. Kalyanaraman, who is still the Chairman, MD, and Promoter. Kalyan Jewellers announced on August 21, 2024, that Highdell Investment Ltd will sell 24.3 million shares (2.36% of the company) to the promoter for Rs.1,300 crore. The company is also expanding with 80 new stores in FY25, aiming to generate cash flow for debt repayment.

Highdell to Sell 2.36% Stake

Highdell Investment Ltd, a part of Warburg Pincus, is offloading a 2.36% stake in Kalyan Jewellers to its promoter, Trikkur Sitarama Iyer Kalyanaraman, for a hefty Rs.1,300 crore. The deal, announced yesterday, will see Highdell sell 2.42 crore shares at Rs.535 each about 2.45% less than the stock’s closing price of Rs.548.15.

What It Means for Kalyanaraman

This event will increase Kalyanaraman’s stake in Kalyan Jewellers from 60.59% to 62.95%, giving him even more sway over the company. However, the sale is still pending as Kalyanaraman needs to secure the necessary funds from financial institutions or non-banking financial companies. This transaction follows Highdell’s earlier stake reduction in March 2023 when it sold off 2.54% of its shares.

Kalyan Jewellers’ Performance

Kalyan Jewellers is on a roll lately. For Q1FY25, the company saw its net profits jump by 27% year-on-year. Revenue from its Indian operations grew by 29%, thanks to an expansion into new markets outside the south. The Middle Eastern operations also grew by 16%. Overall, the company’s revenue reached Rs.5,540 crore, mostly driven by new store openings and a friendly market environment, including lower customs duties in India.

Conclusion: In a Nutshell, Highdell’s sale of its stake to Kalyanaraman is a huge shift in Kalyan Jewellers’ ownership. It boosts Kalyanaraman’s control and reflects their financial health and growth. With his increased stake, Kalyan Jewellers looks set to expand further in the jewellery market.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.