Global private equity firm Warburg Pincus has sold its last tranche of 6.81 per cent in Kalyan Jewellers through a series of bulk and block deals estimated at ₹3,583 crore.
The major buyers in Motilal Oswal MF, Invesco MF, Fidelity Investment Fund, Nomura India Investment Fund, Government of Singapore, Nomura Funds Ireland plc, Citi Group Global Markets Mauritius and Global New Generation Stock Fund.
With the latest stake sale, Warburg has completely exited its investment in the company that was made in 2014. As part of the stake sale, Warburg has entered into an agreement to sell 2.36 per cent stake to Kalyan Jewellers promoter TS Kalyanaraman for ₹1,300 crore.
The share purchase agreement between the promoter and Warburg Pincus’ affiliate, Highdell Investment, was executed at ₹535 per share on Wednesday. The transaction will increase the promoter and promoter group’s shareholding in Kalyan from 60.59 per cent to 62.95 per cent.
Off-market deal
The acquisition is expected to close in the next four weeks, following the completion of financing arrangements. The transaction will be executed as an off-market deal in accordance with the purchase agreement, said the company.
TS Kalyanaraman, promoter and Managing Director, Kalyan Jewellers, said Warburg has played a crucial role in Kalyan Jewellers’ growth and expansion across India and West Asia.
The private equity firm initially held a 30 per cent stake in the company prior to its IPO and reduced it as part of its strategic exit plan. This transaction represents the final step in their planned divestment process, he said.
Shares of Kalyan Jewellers was up 9 per cent at ₹597 on the BSE and market cap was up at ₹61,574 crore. The shares have gained 163 per cent in one year and risen 737 per cent in two years amid the company’s aggressive expansion plans across India.
Offloading stake
In last one year, the private equity firm has reduced its stake in the company to 9.17 per cent in the June quarter against 17.59 per cent held in the same quarter previous year by offloading stake.
In February, it sold 8.4 per cent stake in Kalyan Jewellers India for ₹2,931 crore through the open market operations. Warburg Pincus, through its affiliate Highdell Investment, had cumulatively sold 8,67,29,971 shares at an average price of ₹338 a share in February.
In June last year, the private equity firm had offloaded a 6.2 per cent stake in the jewellery maker at a price of ₹113 a piece.
In June quarter, Kalyan Jewellers revenue was up 24 per cent to ₹178 crore while revenue increased 26 per cent at ₹5,535 crore.