Aditya Birla’s Novel Jewels receives Rs 500 crore debt facilities from ICICI Bank to start operations

ICICI Bank, which is the sole lender so far, has sanctioned Rs 450 crore as a working capital loan and Rs 50 crore as a term loan

Mumbai: ICICI Bank has sanctioned Rs 500 crore debt facilities to Aditya Birla group-promoted jewellery retail store Novel Jewels to kick start its operations next quarter, said people with knowledge of the matter. The promoter companies infused Rs 290 crore in the company last year, the people said.

Initially, Novel Jewels will launch about four to five stores sometime in July across various cities in north, west, and central India. Aditya Birla Group and ICICI Bank did not respond to a request for comments.

ICICI Bank, which is the sole lender so far, has sanctioned Rs 450 crore as a working capital loan and Rs 50 crore as a term loan.

Essel Mining and Industries will hold 51% and invest Rs 148 crore equity capital, while Aditya Birla Chemicals (Thailand) and Surya Kiran Investments will jointly hold 49%. Both have invested Rs 55 crore and Rs 87 crore, respectively. Essel Mining is closely held by the Aditya Birla Group promoters, invested in the mining business, and in various Aditya Birla group companies through its subsidiary IGH Holdings.

Last June, the group announced its foray into branded jewellery retail business with an investment of around Rs 5,000 crore and “will build large-format exclusive jewellery retail stores across India, featuring in-house jewellery brands”. The promoters have committed Rs 5,000 crore since it’s a capital-intensive and competitive business, said a consultant.

Novel Jewels is expected to compete with Tata group’s Tanishq and Reliance Industries promoted Reliance Jewels. As a late entrant, it would also be competing with established listed jewellers like Tribhovandas Bhimji Zaveri, Kalyan Jewellers, and local players.

Courtesy: msn.com