Warburg Pincus pumps Rs 500cr more into Kalyan Jewellers

Kerala-based Kalyan Jewellers on Monday announced that American private equity firm Warburg Pincus has invested an additional Rs 500 crore in the company.

The proceeds will be used for expansion of its network in both domestic and overseas market, a company statement said.

With the second round of investment, the American PE firm's total investment in Kalyan Jewellers has increased to Rs 1,700 crore. It had invested Rs 1,200 crore in 2014.

"The investment by Warburg Pincus is a vindication of the strong growth trajectory of the company," Kalyan Jewellers chairman and managing director T S Kalyanaraman said in a statement.

The company plans to nearly double its presence to 200 plus showrooms using a combination of equity, debt and internal accruals, he said.

It is also working on a blueprint for a foray into the e-commerce segment which will complement the physical retail network.

"We believe that the curb in cash transactions will see a shift from the unorganised sector to organised players like Kalyan. The rationalisation of taxes under the GST regime will increase operational efficiencies significantly," he noted.

Commenting on the development, Warburg Pincus India Pvt managing director Vishal Mahadevia said that the company's "additional investment will be used to accelerate the company's growth efforts in network expansion and pursuing acquisition opportunities."

In the next three years, Kalyan Jewellers said it plans to build its presence in central India including Uttar Pradesh and Madhya Pradesh and add new showrooms in Mumbai, Delhi and the southern region.

The company further said it is looking to expand international operations by entering into new markets such as Saudi Arabia, Bahrain, Oman, Singapore and Malaysia. It will also bolster presence in the United Arab Emirates where it already has 13 showrooms.

At present, Kalyan Jewellers has 106 showrooms across India and West Asia. Affiliates of private equity funds raised by Warburg Pincus have invested close to USD 4 billion in about 50 Indian companies.