Kalyan Jewellers IPO Review: Anil Singhvi says AVOID; Risk-taking, long-term investors can apply, reveals likely listing gains

Kalyan Jewellers IPO Review: Anil Singhvi said that there are no indicators that can make an investor excited about Kalyan Jewellers IPO. However, there are some positives and negatives that need to be understood, the Market Guru said.

Crucially, Singhvi said investors applying for listing gains from Kalyan Jewellers IPO can avoid applying. There may not be even 20% – 25% listing gain in Kalyan Jewellers IPO, says Singhvi. Hence, investors can avoid applying for this IPO. Significantly, if there is a fall in the markets up to the levels of 14500 on Nifty from current levels near 15000, then investors may even lose out on their investment. There should be some cushion to ensure that listing gains will suffice, but that is not the case in Kalyan Jewellers IPO.

See Zee Business Live TV Streaming Below:

Anil Singhvi said that there could be some downside on Kalyan Jewellers IPO listing and investors will have to hold shares for some time before seeing some returns. So, only these investors should apply for this IPO. Kalyan Jewellers valuations offered are not attractive to apply for the IPO.

आज खुलेगा कल्याण ज्वेलर्स का IPO, क्या करें?

कंपनी कितनी दमदार, कहां कमजोर?

अनिल सिंघवी- AVOID करें, सिर्फ ज्यादा जोखिम लेने वाले लंबी अवधि के निवेशक लगाएं पैसे#EditorsTake #KalyanJewellers #IPO @AnilSinghvi_ pic.twitter.com/MtnXIgiXcj

— Zee Business (@ZeeBusiness) March 16, 2021

Anil Singhvi said that the brand of the company is very strong and Bollywood icon Amitabh Bachchan is the Brand Ambassador of Kalyan Jewellers says Singhvi. Track record of the company is very good and has been into the market for a long time. Promoter has experience of over 40 years in this business. Trust and experience in this business has its own value. The company has a good global presence.

Singhvi said the company has kept valuations at a higher price which leaves no incentives for the investors. Singhvi said Kalyan Jewellers IPO pricing at a little lower level would have helped investors to make some money on listing. The company has kept valuations lower than Titan, however, the IPO is still overpriced at current offer which makes it unattractive for investors, says Singhvi. 

Singhvi said that the financials of Kalyan Jewellers are not impressive and the debt levels of the company are high. Management of the company have not given any plan to reduce the debt going forward. Kalyan Jewellers IPO proceeds will be used to reduce some debt, but the interest cost to serve the debt is too high. Balance sheets will significantly improve if the company reduces their Debt levels.

Singhvi said that Kalyan Jewellers RoE is 6.5% – 7%, that the company earns and pays 10.5% to service debt - this logic is difficult to digest. Singhvi said that the company should focus on reducing debt levels.
Anil Singhvi said he will change his view if Kalyan Jewellers will reduce debt and improve its Balance Sheet and Financials going forward.  The Anchor Book of Kalyan Jewellers IPO is good as the Government of Singapore did invest here, says Anil Singhvi. 

So, in final analysis, Kalyan Jewellers IPO review indicates that risky investors can apply for 10% – 15% listing gains but there could be volatility if the market falls.

Anil Singhvi said there are other companies coming with IPO giving good opportunity to invest.