Jewellery manufacturer and exporter Tara Jewels, whose IPO opens on Nov 21, has roped in Austria-based cut crystal and related luxury products maker Swarovski AG as a pre-IPO investor.
Swarovski, through its subsidiary Crystalon Finanz AG, has picked up a little over 9 per cent stake in Tara Jewels for Rs 40.5 crore ($7.4 million).
Mumbai-based Tara Jewel’s public issue has been set at a price band of Rs 225-230 a share, which could value the company at Rs 565 crore and lead to dilution of approximately 19 per cent stake at the upper end of the price band.
The Swarovski deal puts the post-money valuation of the company at Rs 446 crore. The investment was done at Rs 225 per share, the lower end of the price band.
The IPO involves a fresh issue of shares worth Rs 109.5 crore, with a sale of shares worth Rs 70 crore by Fabrikant H K Trading. The issue opens on Nov 21 and closes on Nov 23. Enam Securities Pvt Ltd and ICICI Securities are book running lead managers to the issue.
The company will use the proceeds from the issue to set up 20 new stores in 18 cities at a cost of Rs 66.5 crore. Another Rs 50 crore would be used for repayment or prepayment of debt, which stood at Rs 143 crore.
Tara Jewels is involved in the business manufacturing, exporting and retailing of jewellery, and deals in gold, platinum, honeydium, pristinium and silver jewellery, with or without studded precious and semi-precious stones.
The company has four manufacturing units, three of which are in Mumbai while one is located in Panyu, China. For FY12, Tara produced 10,616.40 kg of jewellery, compared to 4,753.25 kg in FY11. It exports to jewellery chains such as Christ Uhren & Schmuck, and retailers such as Wal-Mart. The firm also entered jewellery retail operations under the brand Tara Jewellers in October 2008 and currently operates 30 stores, spread over an aggregate area of 29,949.01 sq. ft.
Tara Jewels reported 31.83 per cent CAGR growth in total income to Rs 1,401 crore from FY12 to FY10. Net profit rose 33 per cent to Rs 54.2 crore in FY12, compared to FY11. For FY12, sales from retail operations stood at Rs 183.5 crore while exports stood at Rs 1,133.5 crore.
(Edited by Sanghamitra Mandal)