Kalyan Jewellers shares surge 5%; here’s why

Shares of Kalyan Jewellers gained as much as 5% on Monday after the company unveiled a plan to raise up to $200 million via debt securities to refinance its debt. Investors also took cues from quarterly and annual business updates issued by the gems and jewellery company today.

Extending gains for the second straight session, Kalyan Jewellers shares opened marginally higher at ₹61.80, against the previous closing price of ₹61.70. During the session, the stock rose as much as 5.11% to hit an intraday high of ₹64.85 on the BSE. In comparison, the BSE benchmark Sensex was trading at 60,435, up 1,158 points, or 1.96%.

Kalyan Jewellers' share price was trading higher than 5-day, 20-day, and 50-day moving averages, but lower than 100-day and 200-day averages. It has gained 9.45% in the last two days, 8% in a week and 3.6% in the past one month. The stock has delivered a negative return of 8% over one year and 6% since the beginning of the calendar year 2022.

The gold stock trades 16% higher than its 52-week low of ₹55.80 touched on February 24, 2022, while it hit a 52-week high of ₹89.70 on May 9, 2021. The market capitalisation of the midcap stock currently stands at ₹6,612.94 crore.

Kalyan Jewellers in a filing to the BSE said that its board has approved a proposal to raise up to $200 million by issuing U.S. dollar-denominated notes, subject to appropriate market conditions. “In the meeting of its board of directors dated April 03, 2022, approved the potential issuance of fixed-rate, senior U.S. dollar-denominated notes for an aggregate principal amount of up to $200 million, subject to market conditions, to eligible persons, entities, corporate bodies, companies, banks, financial institutions and any other categories of eligible investors permitted to invest in the notes under applicable laws,” it said in an exchange filing today.

The net proceeds of the notes, to be listed on the Singapore Stock Exchange, are intended to be utilised primarily for refinancing of existing borrowings, as well as payment of transaction fees and to meet general corporate purposes.

In a separate release, the jewellery retailer also updated the March quarter and annual business performance. The jewellery showrooms operator said that the business continued to see strong operating momentum in the recently concluded quarter, driven by the resilience of its category, sustained buoyancy in consumer sentiments, and the continuing shift in consumer demand from the unorganised to the organised segment.

“Q4 FY22 was a satisfying quarter with strong momentum, given the context of disruption to showroom operations during the month of January 2022 due to Omicron-driven 3rd wave of the Covid-19 pandemic, the geo-political situation in Russia/Ukraine and its related impact on the markets and gold price volatility,” the company said.

For the January-March quarter of FY22, India business reported around a 7% decline in revenues as compared to the same quarter in the prior year. On a consolidated basis (including the Middle East), the business posted a 6% decline in revenues when compared to the corresponding quarter last year.

For the full financial year 2022, the company recorded a year-on-year growth of 25% in its revenue on a consolidated basis, with the India business growing over 23% as compared to the prior year.

During the quarter under review, the company added 3 new showrooms in India, taking the total number of new showrooms launched during FY22 to 18. As of March 31, 2022, the total number of showrooms across India and the Middle East stood at 154.

The company's online jewellery platform, Candere, recorded revenue growth of over 80% during the January-March quarter of FY22, as compared to the same period during the last year.

Last week, the firm announced the appointment of Vinod Rai as the chairman and independent non-executive director on the board of the company. Rai is the former Comptroller and Auditor General (CAG) of India, the former Chair of the United Nations Panel of External Auditors and has held various positions within the government where he has been instrumental in a wide variety of reforms in India.