According to people familiar with the matter, ICICI Bank has approved Rs 500 crore in debt facilities for the Aditya Birla group's jewellery retail store Novel Jewels, which will begin operations next quarter. According to sources, the promoter companies invested Rs 290 crore in the company last year.
Novel Jewels plans to open four to five stores in various cities across north, west, and central India beginning in July. Aditya Birla Group and ICICI Bank did not respond to ET's requests for comment.
ICICI Bank, the sole lender, has approved Rs 450 crore as a working capital loan and ₹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 ₹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 because it is a capital-intensive and competitive business, according to a consultant.
Novel Jewels is expected to compete with Tanishq from the Tata Group and Reliance Jewels, which is promoted by Reliance Industries. As a late entrant, it would face competition from established listed jewellers such as Tribhovandas Bhimji Zaveri, Kalyan Jewellers, and local players.
.jpg "Overcoming the Hurdles of Scaling a Startup")
