Key Takeaways
- Tribhovandas Bhimji Zaveri's shares soared 20% to a record 366.80 rupees.
- GRT Jewellers will acquire a 74.12% stake in TBZ for 10.34 billion rupees.
- The deal aims to expand the combined entity's presence in both southern and western India.
Tribhovandas Bhimji Zaveri’s shares reached a historic high, jumping 20% to 366.80 rupees, the highest price since the company’s listing. This surge came on the heels of a significant deal where GRT Jewellers, one of India’s leading jewellery retailers, agreed to acquire a controlling stake in TBZ.
Under the terms of the agreement, GRT Jewellers will purchase a 74.12% stake in TBZ from the top shareholders for 10.34 billion rupees, or 209 rupees per share, marking a 31.6% discount from the stock’s closing price on the previous day. The deal also includes a mandatory open offer for the remaining 26% stake.
The acquisition is expected to bolster TBZ’s growth prospects, with analysts at SBICAPS Securities and ICICI Direct predicting a fresh leg of growth for the company. Sunny Agrawal, head of fundamental equity research at SBICAPS Securities, stated, 'The market is expecting a fresh leg of growth for the company with the advent of a new promoter.'
GRT Jewellers, headquartered in Chennai, operates 68 stores in India and one in Singapore, while TBZ, a 162-year-old brand, has 37 stores. The deal aims to complement GRT’s strong presence in southern India with TBZ’s established footprint in western India, facilitating a broader market expansion.
The acquisition is part of a broader trend in the jewellery retail sector, where organised chains are competing for market share in a fragmented industry. Despite weaker volumes, strong revenue growth has been driven by record-high gold prices and a shift towards branded chains by consumers.
More than 12 million TBZ shares changed hands by late morning on Tuesday, a volume about 6.5 times the stock’s 30-day daily average, underscoring the market’s enthusiasm for the deal. The combined entity is expected to have a stronger regional brand image and better standing in the market.
Analysts at ICICI Direct noted, 'The deal comes as organised jewellery chains compete for share in a fragmented market. The combined business would have a stronger regional brand image and better standing in the market.'
The deal is set to transform the landscape of the jewellery retail sector in India, with both companies aiming to leverage each other’s strengths to achieve greater market penetration and profitability.
The market is expecting a fresh leg of growth for the company with the advent of a new promoter.
Sunny Agrawal, Head of fundamental equity research at SBICAPS Securities
The deal comes as organised jewellery chains compete for share in a fragmented market.
Analysts at ICICI Direct, Not specified
