US private equity firm, Warburg Pincus has agreed to invest Rs 500 crore in Kalyan Jewellers, taking its total commitment to the Kerala-based gold retailer to Rs 1,700 crore.

The second round of investment comes at a time when the company is looking to grow its distribution network exponentially in India and expand its overseas operations, Kalyan said in a statement.

ET first reported in its Monday edition that Warburg will invest Rs 500 crore in Kalyan.

The transaction would mark Warburg Pincus' second and final round of investment in Kalyan Jewellers ahead of the jeweller's proposed public issue, expected to hit the markets next year. In 2014, Warburg had invested Rs 1,200 crore to pick 10% stake in Kalyan Jewellers and that was the single largest investment in the jewellery sector in the country.

The funds will be used for Kalyan's expansion plans within and outside the country, the statement said.

"In the next three years, Kalyan Jewellers will build its presence in the central region of the country including Uttar Pradesh and Madhya Pradesh and add new showrooms in Mumbai, Delhi, and the Southern region. Kalyan is also looking to expand international operations by entering into new markets such as Saudi Arabia, Bahrain, Oman, Singapore, and Malaysia. The Company will also bolster its presence in the UAE where it already has 13 showrooms," it said.

Kalyan plans to double its presence to more than 200 showrooms using a combination of equity, debt and internal accruals, its chairman TS Kalyanaraman said in the statement.

"We believe that the curb in cash transactions will see a shift from the unorganized sector to organized players like Kalyan. The rationalization of taxes under the GST regime will increase operational efficiencies significantly," he said.

Commenting on the development, Warburg Pincus India Pvt Managing Director Vishal Mahadevia said that the company's "additional investment will be used to accelerate the company's growth efforts in network expansion and pursuing acquisition opportunities."