Kalyan Jewellers India’s promoter, Trikkur Sitarama Iyer Kalyanaraman, and promoter group are in talks with Motilal Oswal and 360 One to raise ₹2,000-2,500 crore in high-yield debt, according to people familiar with the matter. The funds will be used to increase their equity stake in the jewellery retailer, they said.
“Kalyan Jewellers’ promoters are in discussions with both Motilal Oswal and 360 One to give mandate to either both or one of them for the debt raise,” said one of the persons, who did not wish to be identified. “The debt raise will be partly used to fund the acquisition of stake from Warburg Pincus.”
Queries sent to Kalyan Jewellers, 360 One and Motilal Oswal remained unanswered till press time.
The debt is expected to be priced at 13.5-14% to 14%, with shares pledged as collateral at a 2.5 times coverage ratio, according to the person cited earlier.
If Kalyan Jewellers’ stock price, which was at ₹616 on Monday, falls, additional shares will be required to maintain this pledge, while a drop of over 35% in the stock price would lead to cash collateral. A decline exceeding 45% would trigger compulsory bond redemption, the person said.
Last week, Warburg Pincus affiliate Highdell Investment had announced selling 2.36% of the share capital of the company to the promoter for a purchase price of ₹535 per share, aggregating to ₹1,300 crore, according to the stock exchange announcement. The promoter can raise its stake by about 5% with a ₹2,500 crore fundraising.
