The Rs 4,225 crore-IPO of International Gemmological Institute (India) opens for bidding today, that is, Friday, December 13. The company is offering its shares in the range of Rs 397-417 apiece, for which investors can apply for a minimum of 35 shares and its multiples thereafter. The issue will close for bidding on Tuesday, December 17.
Incorporated in 1999, Mumbai-based International Gemmological Institute is a globally recognized organization certifying and grading diamonds, gemstones, and jewellery. International Gemmological Institute IPO includes a fresh share sale of Rs 1,475 crore, while its promoter BCP Aisa II TopCo will offload shares worth Rs 2,750 crore.
Blackstone-backed International Gemmological Institute raised Rs 1,900.34 crore from 68 anchor investors as it allocated 4.55 crore shares at a price of Rs 417 apiece. It included names like Government Singapore, Monetary Authority of Singapore, Nomura Funds, Abu Dhabi Investment Authority, Government Pension Fund Global, Fidelity, Pinebridge Global Funds and more.
IGI offers education courses and degree plans for the gem and jewellery trade and has a research department. IGI operates 31 laboratories worldwide that grade finished jewellery, natural diamonds, lab-grown diamonds, and gemstones. It operates through 31 branches and labs in 10 countries, including Surat and Mumbai, Antwerp, New York, Bangkok, Dubai, Hong Kong, and Shanghai.
International Gemmological Institute reported a net profit of Rs 326.06 crore with a revenue of Rs 619.49 crore for the six months ended on September 30, 2024. It has reserved shares worth Rs 2 crore for the eligible employees of the company, who will get a discount of Rs 39 apiece. 75% of the net offer for QIBs, 15 per cent NIIs and 10 per cent for retail investors.
Axis Capital, Kotak Mahindra Capital, Morgan Stanley India and SBI Capital Markets are the book running lead managers of the International Gemmological Institute IPO, while Kfin Technologies is the registrar for the issue. Shares shall be listed on both BSE and NSE on Friday, December 20. Here's what brokerage firms said about the IPO of International Gemmological Institute:
Nirmal Bang Securities Rating: Subscribe IGI holds a dominant position in lab-grown diamond certification, positioning it to benefit from the growing consumer preference for sustainable options. The affordability of lab-grown diamonds enhances their growth prospects, while natural diamond certifications expects to foresee steady growth, said Nirmal Bang Securities.
"There are no listed comparable peers globally having similar business dynamics. However, IGI has delivered strong financial metrics. Further, IGI’s has a strong market position and has a potential to benefit from anticipated demand in the diamond certification sector. Thus, we believe the issue is valued at a reasonable valuation and recommend 'subscribe' to the issue," it said.
AUM Capital Rating: Subscribe International Gemmological Institute (India) post the proposed acquisition of its international group is expected to become the undisputed leader in the gems certification business across the globe, said AUM Capital. "A rise in disposable income for the working class is expected to lead to a rise in demand for gems and jewellery. We recommend a 'subscribe' to the issue," it said.
KR Choksey Finserv Rating: Subscribe IGI operates an asset-light business model with advanced technological solutions and scalable infrastructure, enabling fast turnaround times and strong customer retention. It is well-positioned in a fragmented market, benefiting from rising demand for lab-grown diamond certifications, growing discretionary spending in India, said KR Choksey Finserv.
"The IPO valuation looks attractive considering its strong market position, growth potential and alignment with industry trends. It is poised to benefit from the increasing demand for lab-grown diamond certifications, the growing discretionary spending in key markets like India, and the broader industry shift towards transparency and authenticity in jewelry," it added with a 'subscribe' tag.
Canara Bank Securities Rating: Subscribe for long-term gains IGI is focused on providing lab-grown diamond certification, natural diamond certification, jewellery colored stone certification and Education. Their extensive industry knowledge and experience fuels their ability to pioneer initiatives to continuously expand their service offering, said Canara Bank Securities.
"With consistent revenue growth, demonstrated track record of high margins and margin expansion leads to high free cash flow with low capital expenditure business model. However, the issue is fully priced with a P/E of 38.05 times (9MCY24 annualized) and 50.98 times (CY23) We recommend 'subscribe' rating to this issue for potential long-term gains," it said.
StoxBox Rating: Subscribe for long-term Globally, IGI holds a 33 per cent market share for diamonds, studded jewelry, and colored stones certifications and 65 per cent for laboratory-grown diamonds, positioning it as a market leader. IGI offers a full range of services covering grading and classification across different stone types while providing value-added services to its customers, said StoxBox.
"The company’s strategic presence and leadership in India’s laboratory network provide a competitive edge both nationally and internationally. The issue is valued at a P/E of 51 times on the upper price band based on CY23 earnings, which is fairly valued. Therefore, we recommend a 'subscribe' rating for this issue with a medium to long-term investment perspective," it said.
Mehta Equities Rating: Subscribe for long-term IGI is asking for a PE of 41.45 times which seems reasonable looking at its financials growth trajectory, brand equity and market leadership. With India accounting for 95 per cent of global diamond cutting and polishing, and IGI holding a dominant about 50 per cent market share in India, said Mehta Equities.
"We believe the company is well-positioned to capitalize on the rising demand for diamond and jewellery certification services. Hence, with all attributes we recommend investors to invest in International Gemological Institute (India) Ltd IPO for long term perspective," it said.
Swastika Investmart Rating: Subscribe IGI is a renowned organization specializing in the certification and grading of diamonds, gemstones, and jewelry. The company holds a leadership position in the global market. It has consistent growth in financial metrics, said Swastika Investmart. "It has no direct listed peers for comparison. The issue is suitable for investors seeking both listing gains and long-term growth potential."