The International Gemmological Institute (IGI) India, supported by Blackstone, has taken a significant step towards its Initial Public Offering (IPO) by filing draft papers with the Securities and Exchange Board of India (SEBI) to raise Rs 4,000 crore. This IPO consists of a combination of fresh equity issuance and an offer-for-sale by the promoter.
IPO Structure and Objectives
The IPO structure includes a fresh equity issuance amounting to Rs 1,250 crore, alongside an offer-for-sale of shares worth Rs 2,750 crore by BCP Asia II TopCo Pte Ltd, the sole promoter. BCP Asia II TopCo Pte Ltd is affiliated with funds managed by Blackstone, a leading global investment firm. The proceeds from this fresh issuance are earmarked for strategic acquisitions and general corporate purposes.
Acquisition Plans and Corporate Strategy
A significant portion of the funds, approximately Rs 1,100 crore, will be allocated for acquiring IGI Belgium Group and IGI Netherlands Group from the promoter, BCP Asia II TopCo Pte Ltd. These acquisitions are crucial for expanding IGI India’s footprint, as these entities manage IGI’s operations outside India and Turkey. The remaining funds will be utilized for general corporate purposes, which will further strengthen IGI India’s market position.
IGI India’s Dominance in the Diamond Certification Market
IGI India holds a commanding presence in the diamond certification and accreditation market, securing around 50% market share by volume for CY23. The company specializes in certifying natural diamonds, laboratory-grown diamonds, studded jewelry, and colored stones. Additionally, IGI offers educational programs, further solidifying its status as a leader in the gemmological industry.
India’s Role in the Global Diamond Industry
India continues to be the world’s largest hub for diamond cutting and polishing, responsible for approximately 95% of the global supply in terms of volume in CY23. This dominance underscores the strategic importance of IGI India’s operations, as it play a pivotal role in maintaining the country’s leading position in the diamond industry.
Financial Performance and Growth Prospects
IGI India has shown robust financial performance, recording a net profit of Rs 324.7 crore for the financial year ending December 2023, marking a 34.3% increase compared to the previous year’s profit of Rs 241.76 crore. The company’s revenue from operations also surged by 30% year-on-year, reaching Rs 638.5 crore in 2023. The EBITDA for the year grew by 34.3% to Rs 450.1 crore, with a margin expansion of 220 basis points, reaching 70.5%.
In the first quarter of 2024, IGI India reported a profit of Rs 124.8 crore on a revenue of Rs 209.1 crore, reflecting continued strong financial performance and operational efficiency.
Book-running Running managers
The book-running lead managers for IGI India’s IPO include Axis Capital, Kotak Mahindra Capital Company, Morgan Stanley India Company, and SBI Capital Markets. These entities will play a key role in facilitating the IPO process, ensuring it attracts significant investor interest and achieves its fundraising goals.
Conclusion
With its dominant market share, strategic acquisition plans, and strong financial performance, IGI India’s upcoming IPO, backed by Blackstone, is set to attract considerable attention in the capital markets. This move will not only enhance IGI’s growth trajectory but also reinforce India’s leading position in the global diamond industry.
