Warburg Pincus Divests 6.45% Stake in Kalyan Jewellers, Gains Rs 3,584 Crore

Private equity giant Warburg Pincus sold a 6.45% stake in Kalyan Jewellers for Rs 3,584 crore through open market transactions. The shares were sold via Highdell Investment Ltd on the National Stock Exchange (NSE). The shares were disposed of at an average price of Rs 539.10 each.

Representative image

Stake Acquisition by Major Investors

The Singapore government, Fidelity, Nomura, HSBC Mutual Fund, and Citigroup Global Markets acquired stakes in Kalyan Jewellers. Other investors included Invesco MF, Motilal Oswal MF, Nomura Funds Ireland, Monetary Authority of Singapore, and Nomura India Investment Fund.

At the end of June, Highdell Investment Ltd held a 9.17% stake in Kalyan Jewellers. This stake had been held since 2014. The recent sale involved 6,64,89,666 shares or 6.45% of the company.

Share Purchase Agreement Details

Kalyan Jewellers disclosed that a share purchase agreement was executed between its promoter Trikkur Sitarama Iyer Kalyanaraman and Highdell Investment Ltd on August 21. Highdell will sell up to 2,42,99,066 shares or a 2.36% stake at Rs 535 per share, totalling Rs 1,300 crore.

The transaction is contingent on the promoter securing necessary financing to complete the purchase. The company clarified it is not a party to this agreement.

Impact on Promoter Shareholding

Following this transaction, the promoter and promoter group’s shareholding in Kalyan Jewellers will rise from 60.59% to 62.95%. This marks the final step in Warburg Pincus's strategic exit plan from the company.

Warburg Pincus initially held a 30% stake in Kalyan Jewellers before its IPO. Over time, they have reduced their shareholding as part of their divestment strategy.

Market Reaction and Historical Context

Shares of Kalyan Jewellers surged by 10.71% to close at Rs 602.75 on the NSE following the announcement. In June last year, Warburg Pincus had divested a 6.2% stake in Kalyan Jewellers for Rs 725 crore.

Kalyanaraman expressed gratitude for Warburg Pincus's support over the past decade. "We are grateful for our partnership with Warburg Pincus, which has been a driving force behind many of our achievements over the past decade," he said.

Kalyan Jewellers is a leading player in the jewellery market with operations in India and overseas. The company has seen significant growth and expansion across India and the Middle East with Warburg Pincus's support.

This recent transaction underscores Warburg Pincus's role in Kalyan Jewellers' journey and marks their complete exit from the company’s shareholding structure.