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Warburg sells 2.3% stake in Kalyan Jewellers, mops up Rs 257 crore

PE major's holding in the Thrissur-based gold retailer falls to 24.06% from 26.36%; Shares of Kalyan Jewellers dip 9.1% to end at Rs 107.9 on the NSE

Kalyan Jewellers

BS Reporter Mumbai

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Private equity major Warburg Pincus on Tuesday sold 2.3 per cent stake in Kalyan Jewellers India via block deals.

Highdell Investment, a Warburg Pincus firm, sold 23.3 million shares at Rs 110 apiece to mop up Rs 257 crore, data released by stock exchanges showed.

Following the share sale, Warburg’s stake in the Thrissur-based gold retailer fell to 24.06 per cent from 26.36 per cent. Shares of Kalyan Jewellers dipped 9.1 per cent to finish at Rs 107.9 on the NSE, where over Rs 500 crore worth of shares changed hands.

Shares of the company have declined 15 per cent this year after the company missed earnings expectations for the December quarter. Analysts say a sharp uptick in gold prices and a pickup in demand in recent months puts the company on a better footing.

“Demand was muted in December due to a sharp rise in gold prices, but rebounded in January, which should assuage any concerns of a slowdown in demand. Competitive intensity on gold price remains high, but management expects competition to cool off eventually, which should support margins,” said HSBC in a note last month. The brokerage has set a price target of Rs 150, implying 28 per cent upside from current levels.

“A formidable, well-entrenched national brand with pan-India presence across 138 stores in 21 states and union territories, Kalyan is well positioned to ride the wave of sector transition to organised,” HSBC said. Shares of the company trade at about 20 times its consensus earnings estimate for FY24.

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First Published: Mar 28 2023 | 8:32 PM IST

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