Gemmological Institute files draft papers to raise Rs 4,000 crore via IPO

The International Gemological Institute (IGI) holds the top position in the world certification market for lab-grown diamonds and the second position in the market for natural diamonds. Blackstone, the largest investment firm globally, acquired the International Gemological Institute (IGI) in its entirety in May 2023 from Fosun, a Chinese investment firm, and Roland Lorie, a founding family member. Based on the quantity of diamond, stud, and colored stone certifications completed in 2023, the jeweler certification company holds a nearly 33% market share, as per a Redseer report cited in the draft prospectus. The research also predicted that the global market for jewelry would expand at a compound annual growth rate (CAGR) of 3% to 6% from 2023 to 2028 and that the demand for diamonds would rise globally by 6% during that time.

Fund raising from IGI of Rs. 4000 crore via IPO:

According to the company’s regulatory filing on Thursday, the initial public offering (IPO) has a face value of Rs. 2 per equity share and consists of a combination of fresh issues worth up to Rs. 1,250 crore and offers for sale (OFS) worth up to Rs. 2,750 crore made by BCP Asia II TopCo Pte. Ltd., the jewelry certifier’s promoter. The issue’s bookrunner lead managers are Axis Capital, Kotak Mahindra Capital Company, Morgan Stanley India Company, and SBI Capital Markets. Additionally, the company revealed that, in accordance with the draft papers, no more than 75% of the public offering would go to qualified institutional buyers (QIBs), no more than 15% would go to non-institutional investors (NIIs), and 10% would be available to retail investors.

Our company plans to use a portion of the net proceeds to buy all of our promoter’s shares in IGI Belgium Group and IGI Netherlands Group. The company stated in the DRHP filing that “our company will become the 100% shareholder of IGI Belgium and IGI Netherlands following the completion of the proposed acquisitions and will be responsible for the operation of the IGI business globally.”

Revenue model for IGI:

The operational revenue for 2023 climbed by 30% compared to the previous year, reaching Rs 638.5 crore. Earnings before interest, taxes, depreciation, and amortization (EBITDA) increased by 34.3% to Rs 450.1 crore during the year, and the margin increased by 220 basis points to 70.5% over the prior year.

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Conclusion: The International Gemological Institute (IGI) plans to proceed with an initial public offering (IPO) and intends to utilize a portion of the proceeds to purchase all promoter shares in order to acquire a 100% ownership stake in IGI Belgium and the Netherlands.