CCI approves proposal to invest in 24 per cent stake in Kalyan Jewellers

The Competition Commission of India (CCI), has approved Warburg Pincus-invested Highdell’s proposal to invest in a 24 per cent stake in Kalyan Jewellers, reports say. Highdell, an investment holding company had approached CCI with a notice to seek approval.

CCI is a body which works to create and sustain fair competition in the economy that will provide a ‘level playing field’ to the producers and make the markets work for the welfare of the consumers.

CCI noted that the investment in Kalyan Jewellers would not likely have an ‘appreciable adverse effect on competition in India’. It further stated that as per the notice both Highdell and Warburg Pincus whether directly or indirectly, do not hold any current investment in the gem and jewellery manufacturing and sales market in India, as such there is no ‘horizontal product overlap and vertical relationship’, and that the deal would not affect competitive conditions in India," reports add.

A Shareholders' Agreement (SHA) and a Subscription and Share Purchase Agreement (SSPA) between Highdell, Kalyan Jewellers and promoters and other shareholders of Kalyan were executed on August 28. As per the terms of the deal, Highdell is to acquire the said stake on a fully diluted basis, and as per the Shareholders' Agreement, Highdell would also "acquire certain affirmative and veto rights on certain key business decisions," according to CCI, reports add.

The shareholders of Highdell Investment Ltd are private equity funds managed by Warburg Pincus.