An affiliate of global private equity (PE) major Warburg Pincus has invested Rs 500 crore in Thrissur-headquartered Kalyan Jewellers, thus taking its total investment in the company to Rs 1,700 crore.
Earlier in 2014, the PE firm had invested Rs 1,200 crore in the Kerala-based jewellery retailer.
Vishal Mahadevia, managing director, Warburg Pincus India Pvt Ltd, said, "We see a tremendous opportunity for Kalyan Jewellers to build a strong, branded design-led jewellery business. Our additional investment will be used to accelerate the company's growth efforts in network expansion and pursuing acquisition opportunities."
The second round of investment will be used by Kalyan Jewellers to grow its distribution network exponentially in India and expand its overseas operations. In the next three years, the jewellery firm will build its presence in Uttar Pradesh and Madhya Pradesh and add new showrooms in Mumbai, Delhi and the Southern region. The company is also looking to expand international operations by entering into new markets such as Saudi Arabia, Bahrain, Oman, Singapore and Malaysia. The company will also bolster its presence in the UAE where it already has 13 showrooms.
The investment by Warburg Pincus, according to T S Kalyanaraman, chairman and managing director, Kalyan Jewellers, is a vindication of the strong growth trajectory. "We plan to nearly double presence to 200 plus showrooms using a combination of equity, debt and internal accruals. We will continue with our strategy to innovate and expand our product portfolio to fulfil local customer preferences across regions.
"We are also working on a blueprint for a foray into the e-commerce segment which will complement our physical retail network. We believe that the curb in cash transactions will see a shift from the unorganised sector to organised players. The rationalisation of taxes under the GST regime will increase operational efficiencies significantly."
Over the past three years, Kalyan has nearly doubled its retail presence in India to 106 showrooms including 23 in West Asia. The company has opened showrooms in markets such as West Bengal, Odisha and Rajasthan while shoring up its presence in the Western and Northern regions of the country. Globally, the company entered new markets including Qatar and Kuwait with multiple showrooms. It has also initiated the process of converting its 630 'My Kalyan' customer service outlets into mini-diamond stores to tap into the growing demand for diamond jewellery.
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