 "Kalyan Jewellers tanks 11% on large block deal; over 39 mn shares exchanged")
At 09:28 am; KJIL was quoting 8.4 per cent lower at Rs 108.65. Around 33.8 million shares, representing 3.3 per cent of total equity of the company, changed hands on the NSE. On the BSE, about 5.8 million shares or 0.56 per cent of total equity of Kalyan Jewellers changed hands, the exchange data showed. The names of the buyers and sellers were not ascertained immediately.
According to a media report, Warburg Pincus, one of the key investors in KJIL, was likely to offload a 2.5 per cent stake in the company through a block deal today. The shares were said to be sold by Highdell Investments, the subsidiary through which Warburg Pincus has made its investment in the jewellery firm, as per a report by CNBC TV-18.
As on December 31, 2022, Highdell Investment Ltd held 271.54 million or 26.36 per cent stake in KJIL, the shareholding pattern data shows.
Thus far in the calendar year 2023, KJIL has underperformed the market by falling 16 per cent as compared to a nearly 7 per cent decline in the Nifty50. The stock had hit a record high of Rs 134.20 on December 29, 2022. The company made its stock market debut on March 26, 2021. It issued shares at a price of Rs 87 per share in the initial public offering (IPO).
Kalyan is among India’s top five retail gold jewellery companies accounting for about 6 per cent of the total organised market share, as per the company. KJIL has 138 showrooms across 21 Indian states and union territories. Also, the group has 31 showrooms across four countries in the Middle East.
Meanwhile, on March 20, 2023 India Ratings and Research (Ind-Ra) revised KJIL’s outlook to positive from stable while affirming the long-term issuer rating at ‘IND A’.
"A significant improvement in the operational performance with an improvement in liquidity position, leading to the consolidated net leverage falling below 2.5x, on a sustained basis, could lead to a positive rating action", the rating agency said in its rationale.
It added that any deterioration in KJIL’s operating performance, or any undisclosed debt-funded capital expenditure, leading to deterioration in the liquidity position and/or net leverage remaining above 2.5x, on a sustained basis, could lead to the outlook being revised back to stable.
Technical View
Bias: Negative
Target: Rs 97
Support: Rs 107; Rs 105
Resistance: Rs 115; Rs 120
Broadly, the stock has been swinging in the range of Rs 105 - Rs 120 since the start of the calendar year. With today's sharp fall, the stock once again tested the lower-end of the existing trading band so far.
More From This Section
Further, the stock has also dipped below its key moving averages on the daily chart. The 20-, 50- and 100-DMA (Daily Moving Average) are seen converging around the Rs 115-level.
On the downside, Rs 105 - 107 can be considered a support zone, owing to the lower-end of the Bollinger Band. However, consistent trade below Rs 115, can force the stock to break the downside support and slide towards the 200-DMA, thus indicating a downside target o Rs 97.
(With inputs from Rex Cano)