International Gemmological Institute IPO: Check IPO Date, Lot Size, Price & Details

About the company:

Established in February 1999, International Gemmological Institute (India) Limited is a globally renowned organization specializing in the certification and grading of diamonds, gemstones, and jewelry. The company provides independent grading reports based on internationally accepted standards, analyzing key attributes such as cut, color, clarity, and carat weight. IGI also offers educational programs in gemology and jewelry design and houses a dedicated research department. With a network of 31 laboratories across 10 countries, including key hubs like Surat, Mumbai, Antwerp, and New York, IGI serves as a trusted authority in assessing the quality and authenticity of natural and lab-grown diamonds, colored stones, and finished jewelry. Its 18 gemology schools further support the trade by training thousands of students annually.

IPO Details:

The objectives of the fresh issue:

The company intends to utilize the net proceeds received from the fresh issue towards:

• Payment of the purchase consideration for the acquisition of IGI Belgium Group and IGI Netherlands Group from the Promoter; and
• General corporate purposes.

Key Strengths and Opportunities:

• International Gemmological Institute Limited is a prominent global player, ranking as the second-largest independent provider of certification and accreditation services for diamonds, studded jewellery, and colored stones. In 2023, the company held a significant 33% share of the global market for certifications in these categories. Within India, the world’s leading hub for diamond cutting and polishing, IGI stands as the largest independent certifier, commanding approximately 50% of the market by certification volume.
• IGI is among a select group of global gemological institutions providing a full spectrum of services, including grading, certification, and classification for natural and lab-grown diamonds, colored stones, and studded jewelry. It also offers specialized services like screening and detection of synthetic diamonds, parcel sorting, and audit support for financial entities, positioning itself as a trusted partner in the gem and jewelry industry.
• Through its IGI Schools of Gemology, the company offers tailored educational programs for industry professionals, beginners, and enthusiasts. Flexible e-learning options in seven languages and customized training for corporate clients deepen relationships and expand its global reach.

Risks:

• The proposed use of funds for acquisitions will expand IGI's responsibility to oversee and manage operations globally. This international dispersion of business activities may pose challenges in achieving seamless administration and operational efficiency. Difficulties in integrating and managing the acquired entities could lead to inefficiencies, potentially impacting the company’s overall performance and financial results.
• The promoter, primarily an investment holding entity, lacks a deep track record in the gemological industry. While the management team has extensive experience, the promoter's limited direct involvement may raise concerns. Post-IPO, the promoter's significant shareholding could influence decisions, and any substantial shareholding change might affect equity share trading, impacting business and financial performance.
• IGI’s business heavily relies on its brand value and reputation. Any negative publicity, reputational damage, or decline in brand perception could reduce demand for its services, erode market share, and significantly affect the company’s growth and financial stability.
• A large portion of IGI’s pre-acquisition operations are conducted on leased premises, and any issues in renewing or extending these agreements could disrupt operations. Additionally, non-registration of certain premises, as required by Indian law, may expose the company to regulatory and operational risks.

Financial Snapshot:

Conclusion:

International Gemmological Institute Limited comes at an earnings valuation of 51x based on its earnings per share (EPS) as of December 31, 2023, and the upper price band. The company has no listed peer in India and hence, industry comparison is currently not possible. Considering the financials, risks, and future growth prospects, we advise our investors to consider subscribing to the International Gemmological Institute Limited IPO solely for potential listing gains.