Warburg Pincus Invests in Kalyan Jewelers
The
funds are to be used for expansion of Kalyan Jewelers
India:
United States based
private equity firm, Warburg Pincus, has agreed to invest USD76.9 million in
Kalyan Jewelers, taking its total commitment to the Kerala based gold retailer
to USD261.54 million. The second round of investment comes at a time when the
company is looking to grow its distribution network exponentially in India and
expand its overseas operations, Kalyan said in a statement.
The transaction would mark Warburg
Pincus' second and final round of investment in Kalyan Jewelers ahead of the
jeweler’s proposed public issue, expected to hit the markets next year. In
2014, Warburg had invested USD184.61 million to pick 10% stake in Kalyan
Jewelers and that was the single largest investment in the jewelry sector of
the country. The funds would be used for Kalyan's expansion plans within and
outside the country.
According to TechSci Research, as the
gems and jewelry market in India is highly competitive, the investment is set
to benefit the Kalyan Jewelers, as the company is betting on expansion plans to
increase its market share in India against other major players.
According to a report published by TechSci Research, “India Gems and Jewelry Market By Product Type, By Point of Sale, By Organized vs.
Unorganized, Competition Forecast and Opportunities, 2011-2021”, gems and jewelry market in the
country is projected to grow at a CAGR of around 11% during till 2021. The
anticipated growth in market can be attributed to fluctuating gold prices in
India, opening of exclusive showrooms, selling jewelry through online retail
space and tie-ups with online vendors such as flipkart, amazon, etc., to
facilitate easy sale and supply of gems and jewelry to end customers. Demand
for gems and jewelry is predominantly concentrated in the southern region of
India because of aggressive marketing strategies adopted by companies and
increased brand consciousness along with rising disposable income of people in
the region.