Choice Equity Broking IPO report on Kalyan Jewellers India
The Kerala-based jewelry maker, Kalyan Jewellers India Ltd. (Kalyan Jewellers) is planning to raise up to Rs. 11,750mn through an IPO, which opens on 16th Mar. and closes on 18th Mar. 2021. The price band is Rs. 86 - 87 per share. The issue is a combination of fresh issue and OFS. The company will not receive any proceeds from the OFS part. Of the net proceeds from the fresh issue, around Rs. 6,000mn will be utilized to fund the working capital requirement of the company. Residual funds will be used for general corporate purposes.
Valuation and Outlook
At higher price band of Rs. 87, the company is demanding a TTM P/S valuation of 1.2x, which is at a significant premium to the peer average of 0.4x (excluding Titan Company Ltd.). Thus considering the above observations we assign an “AVOID” rating for the issue.
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