Kalyan Jewellers India’s promoter, Trikkur Sitarama Iyer Kalyanarama, and the promoter group are looking to raise ₹2,000-2,500 crore in high-interest debt. They are in discussions with Motilal Oswal and 360 One for this funding, according to sources familiar with the situation. The money raised will be used to increase their stake in the jewellery company.
A source revealed, “Kalyan Jewellers’ promoters are negotiating with both Motilal Oswal and 360 One to handle the debt raise, either together or separately.” The source added that part of the funds would be used to buy shares from Warburg Pincus.
No responses were received from Kalyan Jewellers, 360 One, or Motilal Oswal at the time of writing.
The debt is expected to come with an interest rate of 13.5-14% and will have shares pledged as collateral at a 2.5 times coverage ratio. If Kalyan Jewellers’ share price, currently at ₹616, drops, more shares will need to be pledged to maintain the collateral. A price drop of over 35% would require additional cash collateral, and a drop of more than 45% would lead to mandatory bond repayment.
Recently, Warburg Pincus’s Highdell Investment sold 2.36% of Kalyan Jewellers to the promoter at ₹535 per share, amounting to ₹1,300 crore. With the new ₹2,500 crore funding, the promoter group could increase their stake by about 5%.
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