SAIF Partners to pick 10% stake in watch components maker KDDL for $5M

Chandigarh-based KDDL Ltd, a manufacturer and supplier of watch components, has received its board's approval to raise Rs 30 crore ($4.7 million) from SAIF Partners through a preferential allotment, according to a stock market disclosure.

The deal, which is subject to mandatory approvals from shareholders and others, involves issue of up to 10,08,400 equity shares at Rs 297.50 each. This would give the venture capital and growth equity investor around 10 per cent stake.

The firm has a capacity of making over 30 million hands annually and has global clients in Switzerland and Hong Kong, according to its website.

In 2007, KDDL had acquired acquired Swiss firm Jacques Boegli SA for Rs 3.1 crore to expand its business in Europe, the heart of luxury watch industry.

It is not the first time KDDL is raising PE money. Last December, consumer centric venture fund Sixth Sense Ventures, floated by former IDFC Securities' managing director and its co-head of research Nikhil Vora, had made its first investment in luxury watches retail chain operator Ethos Ltd.

Ethos, a subsidiary of KDDL, is one of India’s largest chains of luxury watch boutiques with 44 stores across the country and an authorised retailer for around 50 global luxury watch brands. It generated revenues of Rs 220 crore in FY14, up 27 per cent from Rs 172 crore in FY13. It is yet to disclose detailed financials for FY15.

KDDL, which draws bulk of its overall revenue from the retail arm, saw its consolidated sales rise by a quarter to Rs 403.1 crore with its net profit almost flat at Rs 8.68 crore for the year ended March 31, 2015 over the previous year.

KDDL's scrip opened at Rs 329.80 a share, hitting the upper circuit filter for the day with 20 rise on BSE in a weak Mumbai market on Monday. It did not budge for the rest of the day thereby clocking negligible trading.

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