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International Gemmological Institute (India) Limited is a globally recognized organization certifying and grading diamonds, gemstones, and jewellery. International Gemmological Institute IPO aims to raise Rs 4,225.00 crores. The issue is a combination of fresh issue aggregating to Rs 1,475 crores and offer for sale aggregating to Rs 2,750 crores.

About International Gemmological Institute (India) Limited:

• The Company was incorporated as ‘‘International Gemmological Institute (India) Private Limited’ (IGI) on February 23, 1999. BCP Asia II TopCo Pte. Ltd. is the promoter of the company.
• Since May 2023, IGI has been wholly owned by BCP Asia II TopCo Pte. Ltd., which is an affiliate of funds managed and/or advised by affiliates of Blackstone, the world’s largest alternative asset manager, based on AUM.
• IGI’s certification business is conducted through its global network of 31 branches which are equipped with IGI laboratories located across 10 countries. These include key markets such as Surat and Mumbai in India, Antwerp, Belgium, New York, USA, Bangkok, Thailand, Dubai, UAE, Hong Kong and Shanghai, the PRC etc.
• Group’s primary business is the provision of services related to the certification and accreditation of natural diamonds, laboratory grown diamonds, studded jewelry and colored stones as well as the offering of educational programs.
• As of Sep’24, the company operates the largest pan-India laboratory network among global peers for grading lab-grown diamonds.

Financials :International Gemmological Institute (India) Limited

Anchor: International Gemmological Institute IPO

International Gemmological Institute Limited raised ₹1,900 crore from anchor investors like Government of Singapore, ICICI Prudential Mutual Fund, Nomura Holdings, Abu Dhabi Investment Authority, Government Pension Fund Global, Axis Mutual Fund, Fidelity Investment Trust, Quant Mutual Fund, SBI Life Insurance, Whiteoak Capital, and Motilal Oswal were among other top investors. 33.41 per cent of the allocation to anchor investors was allocated to nine domestic mutual funds through a total of 33 schemes.

Salient Points: International Gemmological Institute IPO

• The global jewelry market is expected to grow at a CAGR of 3-6% in value terms from 2023 to 2028, with the gold and diamond-studded jewelry market expected to grow at a CAGR of 5% and 6%, in value terms,
• The fresh IPO proceeds are to be used primarily to finance the acquisition of IGI Belgium Group and IGI Netherlands Group from the promoter. Thus in true sense whole of the IPO is exit by promoter Blackrock.
• IGI grading reports play an essential role in the global diamond, gem and jewelry market, serving as the common language of trust and confidence in the gemological world.

• Peers: None

• The International Gemmological Institute (IGI) is recognized as the world’s second-largest provider of certification and accreditation services for diamonds, studded jewelry, and colored stones, holding a 33% market share by number of certifications in 2023. 
• According to the Redseer Report, IGI is esteemed in the gem certification industry and is especially dominant in the rapidly expanding market for laboratory-grown diamonds, where it commands a 65% market share. Furthermore, IGI also has a significant 42% market share in studded jewelry certifications in 2023.
• The no. 1 player in the industry is larger not-for-profit peer Gemological Institute of America (GIA).
• IGI grading reports play an essential role in the global diamond, gem and jewelry market, serving as a statement of trust and confidence in the gemological world.
• On flip side whole issue is basically an exit by Black stone. Blackstone 100% stake to drop to 77% post IP and they are making whooping 5x return in 20 months.
• Certification pricing has remained stagnant for the past 4 years and company’s growth has been mostly volume driven as lab grown diamonds, accounted for 59% of revenue, while natural mined diamonds remained flat.
• There has been continuous downtrend in price of Lab grown diamonds though overall their is good buoyancy in this segment. Lab-grown diamond prices have dropped 37% (2020-23) & 65% (2016-20). At the same time Lab-grown diamonds are growing fast and contributing 60% of revenue.
• I intend to apply in International Gemmological Institute IPO. Company is a major player in the gem certification market and its commanding dominant position in segments like laboratory-grown diamonds. It is a duopoly business, with high barriers to entry and net margins as high as 40%. The services involve a significant amount of trust and has high entry barriers.
• GMP as reported in media is 90-95 (22%).
• This post is exploratory and educational purposes only.
• Standard disclaimer: I am not a SEBI registered analyst and above analysis is for educational purpose only. Iam a postgraduate in engineering & Management . I have in the past cleared some exams like NISM-Series-V-A: Mutual Fund Distributors Certification, NISM-Series-X-A: Investment Adviser (Level 1) Certification and NISM-Series-X-B: Investment Adviser (Level 2) Examination. This post is my view on the subject matter and is only academic and exploratory in nature. It is not meant to influence investment decisions of investors. I may have bias/vested interest in covered Stock/Mutual Funds/NCD etc. due to my own investment or leaning. Further my understanding of the areas on which I write may be imperfect or incomplete and data could be wrong due to limited time and resources at my disposal. Do check the data from company’s RHP and exchanges before making any decision. Please do your own due diligence as stock market/MF investments have high degree of inherent risk.