Joyalukkas plans Rs.3,000 crore IPO

One of India’s largest jewellery chains, Joyalukkas, is planning an IPO in the last quarter of FY22. The company is expected to file the DRHP with SEBI in the last week of November or early December. While details of the IPO are to be officially announced, it is reported that Joyalukkas may look to raise $400 million through the IPO (Rs.3,000 crore).

Joyalukkas has apparently sounded out a slew of top investment bankers to handle the mandate for the issue. It is apparently looking at an overall indicative valuation in the range of $4.8-4.9 billion. If it works out then it would be the second most valuable jewellery company in India after Titan. Currently, while Titan has a market cap of $24 billion, the next most valuable is Kalyan Jewellers, with market cap below $1 billion.

Joyalukkas has 130 jewellery outlets spread across 11 countries and is especially strong in India and Middle East. Joyalukkas is looking to expand to tap the revenge buying that is expected to emerge in the post-pandemic demand revival. Also, the IPO will give them ammunition to tap the next festive season, when most gold purchases happen.

Incidentally, this is the second time Joyalukkas will be attempting an IPO. It had finalized plans for the IPO in 2018 but shelved it after the Nirav Mode scam hit PNB. Most jewellery companies had come under the scanner and even credit to jewellers tightened. Under the changed circumstances, Joyalukkas had opted to put off IPO plans in April 2018.

Currently, Joyalukkas sees a number of favourable triggers. The IPO markets are buoyant with the capacity to absorb large amounts of capital. Secondly, gold is emerging as a portfolio asset class and many Indians still prefer to hold physical gold. The World Gold Council has projected a sharp revival in gold demand in India. The IPO gives Joyalukkas the stock currency to grow.