Kalyan Jewellers slips 7%, hits 6-mth low; tanks 38% in 13 days; here's why

The company's promoters pledged an additional 36.15 million equity shares or 3.5 per cent of total equity of the company in favor of multiple non banking finance companies and others.

Shares of Kalyan Jewellers hit six-month low of Rs 491.25, falling 7 per cent on the BSE in Tuesday’s intra-day trade, erasing its entire Monday’s gain, after promoters pledged an additional 36.15 million equity shares or 3.5 per cent of total equity of the company in favour of multiple non banking finance companies (NBFCs) and others.

 

Ramesh Trikkur Kalyanaraman has pledged an additional 17.03 million equity shares representing 1.65 per cent holding in the company, while, Seetharam Trikkur Kalyanaraman has pledged an additional 19.12 million equity shares or 1.85 per cent stake in the company, the disclosure made by Kalyan Jewellers shows. CLICK HERE FOR DETAILS

 

These promoters have pledged shares of the company in favour of Catalyst Trusteeship, Bajaj Finance, Aditya Birla Finance, Tata Capital, Infina Finance, STCI Finance, and HSBC Invest Direct Financial Service to avail loan facilities from them.

 

With these pledge shares, currently, total 24.89 per cent of the prompter shareholding (15.64 per cent of total equity capital of the company) has been pledged. As on December 31, 2024, total 19.32 per cent the promoter shareholding (12.14 per cent of total equity capital of the company) had pledged, the shareholding pattern data shows.

 

On August 22, 2024, Private equity firm Warburg Pincus had sold its entire 9.17 per cent holdings in Kalyan Jewellers. The promoters had purchased 24.3 million equity shares or 2.36 per cent stake of the company, for a purchase price of Rs 535 per share aggregating to Rs 1,300 crore. Among the other buyers were Motilal Oswal Mutual Fund, Nomura and Government of Singapore.

 

Meanwhile, the stock price of Kalyan Jewellers has fallen below its previous low of Rs 498.85 touched on Friday, January 17, 2025. It erased its entire 6 per cent gain recorded on Monday. In the past 13 trading days, the stock plunged 38 per cent despite the company’s strong denial on rumours on corporate governance, share pledge, concerns around auditors, and allegations of colluding with fund managers to write the price in the market. 

 

However, Motilal Oswal Asset Management Company (MOAMC) on Sunday, January 19 issued a statement addressing recent social media allegations. MOAMC is a subsidiary of the brokerage firm Motilal Oswal Financial Services.

 

In recent weeks, social media posts have alleged that officials at MOAMC may have been bribed to make substantial investments in Kalyan Jewellers. The firm strongly denied the "baseless, malicious, and defamatory allegations" circulating online against MOAMC and its officials. Without naming any specific individuals, MOAMC said, "These unfounded accusations are a calculated attempt by vested interests to tarnish the reputation our organization and leadership have built over decades."

 

The stock hit a record high of Rs 794.60 on January 1, 2025. The market value of Kalyan Jewellers has more than doubled in the previous two calendar years. In the calendar year 2024 (CY24), it soared 116 per cent, while, in CY23, it had zoomed 180 per cent. In comparison, the BSE Sensex had gained 20 per cent in CY23 and 9 per cent in CY24. 

 

The company made its stock market debut on March 26, 2021. The stock had hit a record low of Rs 55.20 on May 11, 2022. Despite a sharp correction from all-time high levels, the stock price of Kalyan Jewellers is trading 465 per cent higher against its issue price of Rs 87 per share.