Business Profile of the International Gemmological Institute (India) Limited
IGI India, part of IGI, is world's second largest global provider of certification and accreditation services for natural diamonds, laboratory-grown diamonds, studded jewelry, and colored stones. In India, IGI holding approximately 50% market share in terms of certifications. For laboratory-grown diamonds, IGI is the global leader, with 65% of the market share.
IGI offers comprehensive diamond grading, evaluating the quality and authenticity of colored stones, grading and assessing finished jewelry pieces, and conducting educational programs and courses in gemology, diamond grading, jewelry design, and related subjects. As of March 31, 2024, IGI had over 7,500 customers across 10 countries, including laboratory-grown diamond growers, natural diamond and colored stone wholesalers, jewelry manufacturers, and retailers. The IGI Group is supported by 786 employees, including 297 gemologists and other professionals in research, education, and certification processes.
The Main Objectives to Launch the International Gemmological Institute (India) Limited IPO
As per the draft red hearing prospects, the IPO issue consists of both Offer for sale and fresh issue by the company.
- The OFS consists of up to 65,947,242 Equity Shares aggregating up to Rs. 2750 crores. Nothing from those proceeds of OFS will be allotted to company.
- International Gemmological Institute (India) IPO offer also has a fresh issue of Rs. 1475 crores; of which Rs. 1100 crores will be used for acquisition and rest for general corporate purposes.
| Particulars | Estimated Cost | Amount to be funded | Net Proceeds to deployed in year ending | ||
| Dec 31, 2024 | Dec 31, 2025 | Dec 31, 2026 | |||
| Acquisition of the IGI Belgium Group and IGI Netherlands Group from promoter | 12, 948.43 | 11, 000 | 11, 000 | - | - |
| General corporate purposes | [●] | [●] | [●] | [●] | [●] |
| Net Proceeds | [●] | [●] | [●] | [●] | [●] |
IPO Details of International Gemmological Institute (India) Limited:
| IPO Open Date | December 13, 2024 |
| IPO Close Date | December 17, 2024 |
| Basis of Allotment | December 18, 2024 |
| Listing Date | December 20, 2024 |
| Face Value | ₹2 per share |
| Price | ₹397 to ₹417 per share |
| Lot Size | 35 Shares |
| Total Issue Size | 101,318,944 shares |
| (aggregating up to ₹4225.00 Cr) | |
| Fresh Issue | 35,371,702 shares |
| (aggregating up to ₹1475 Cr) | |
| Offer For Sale | Up to 65,947,242 Equity Shares |
| (aggregating up to ₹2750 Cr) | |
| Issue Type | Book Built Issue IPO |
| Listing At | BSE & NSE |
| QIB Shares Offered | Not less than 75% of the Net Issue |
| Retail Shares Offered | Not more than 10% of the Net Issue |
| NII (HNI) Shares Offered | Not more than 15% of the Net Issue |
International Gemmological Institute (India) Limited IPO Issue Price & Size
The issue price of International Gemmological Institute (India) Limited has been announced for Rs. 397 to Rs. 417. The company has an OFS of up to 65,947,242 equity shares consisting of Rs. 2750 crores and fresh issue of Rs. 1475 crores.
Launch Date of International Gemmological Institute (India) Limited IPO
The IPO of International Gemmological Institute (India) Company is launching on December 13, hence the opening date for bidding is December 13 and the IPO is closing on December 17. Investors can bid in this IPO between these days during the primary market hours.
International Gemmological Institute (India) Limited Financial Statements
| Particulars | For 3 months period ended31 March 2024 | For the year ended | ||
| Dec 31, 2023 | Dec 31, 2024 | Dec 31, 2025 | ||
| Income | ||||
| Revenue from operations | 2091.07 | 6385.28 | 4909.94 | 3646.91 |
| Other income | 65.55 | 101.32 | 83.38 | 95.97 |
| Total income | 2156.62 | 6486.6 | 4993.32 | 3742.88 |
| Expenses | ||||
| Purchase of stock-in-trade | 11.94 | 39.13 | 20.18 | 15.31 |
| Change in inventories of stock-in-trade | -2.01 | -6.1 | 0.18 | 2.04 |
| Employee benefits expenses | 219.48 | 970.91 | 876.33 | 735.21 |
| Finance costs | 6.41 | 33.08 | 26.34 | 17.04 |
| Depreciation and amortization expenses | 36.86 | 131.64 | 115.25 | 124.95 |
| Other expenses | 208.65 | 880.16 | 661.43 | 487.87 |
| Total expenses | 481.33 | 2048.82 | 1699.71 | 1382.42 |
| Restated Profit for the period / year | 1248.02 | 3247.38 | 2417.58 | 1715.3 |
| Particulars | Unit | As of and for the three-months period ended March 31, 2024 | As of and for the Calendar Year ended | ||
| Dec 31, 2023 | Dec 31, 2024 | Dec 31, 2025 | |||
| Revenue from Operations of the Pre- Acquisition Group | (₹) in million | 2091.07 | 6385.28 | 4909.94 | 2646.91 |
| Revenue Growth (Y- o-Y) of the Pre- Acquisition Group | % | N.A. | 30.05% | 34.63% | N.A. |
| Segmental Revenue by service line of the Pre-Acquisition Group | |||||
| Certification services | (₹) in million | 2071.26 | 6206.82 | 4777.44 | 3574.3 |
| Educational courses | (₹) in million | 11.83 | 53.59 | 38.73 | 24.71 |
| Others | (₹) in million | 7.98 | 124.87 | 9.77 | 47.9 |
| EBITDA of the Pre- Acquisition Group | (₹) in million | 1653.01 | 4501.18 | 3351.82 | 2406.48 |
| EBITDA Y-o-Y growth of the Pre- Acquisition Group | % | N.A. | 34.29 | 38.28 | N.A. |
| EBITDA Margin% of the Pre-Acquisition Group | % | 79.05 | 70.49 | 68.27 | 65.99 |
| Profit after tax of the Pre-Acquisition Group | (₹) in million | 1248.02 | 3247.38 | 2417.58 | 1715.3 |
| Profit after tax margin of the Pre- Acquisition Group | % | 59.68 | 50.86 | 49.24 | 47.03 |
| Return on equity of the Pre-Acquisition Group | % | 23.37 | 76.58 | 83.13 | 74.39 |
| Return on capital employed of the Pre- Acquisition Group | % | 27.39 | 80.96 | 87.09 | 86.79 |
| Net working capital of the Pre- Acquisition Group | (₹) in million | 3236.07 | 2968.3 | 2371.3 | 1486.81 |
| Number of IGI laboratories of the Pre-Acquisition Group | Number | 20 | 20 | 19 | 16 |
| Number of schools of the Pre-Acquisition Group | Number | 9 | 9 | 8 | 8 |
| Number of reports per year by the Pre- Acquisition Group | Number in Million | 2.2 | 7.21 | 5.87 | 4.29 |
| Number of employees of the Pre- Acquisition Group | Number | 786 | 727 | 542 | 498 |
International Gemmological Institute (India) Limited Promoters & Shareholding
As per DRHP, BCP Asia II TopCo Pte. Ltd. is the promoter of the International Gemmological Institute (India). BCP Asia II TopCo Pte holds 100% shareholding in the company.
Should You Subscribe to International Gemmological Institute (India) Limited IPO or Not
While investing or subscribing to any IPO, consider the investment rationales related to the company. Hence, here you can find out the strength of the company that will be its growth factors. And also check the risk factors that can affect the growth and operational efficiency of the company.
Competitive Strengths of International Gemmological Institute (India) Limited:
2nd largest independent certification and accreditation services provider
IGI, the world's second-largest independent certification and accreditation services provider for diamonds, studded jewelry, and colored stones certifications, holds a global market share of approximately 33%. In India, the largest center for cutting and polishing diamonds, IGI holds a 50% market share in terms of certifications for diamonds, studded jewelry, and colored stones for CY2023. The loose gemstone and studded jewelry certification market faces high barriers to entry, including leading laboratories, high initial equipment and infrastructure costs, established education practices, and strategic partnerships with jewelry retailers. IGI has advanced various technical and industry practices since its founding in 1975, including issuing jewelry identification reports, introducing "Hearts & Arrows" diamond reports, and providing certification and accreditation services in India. IGI's laboratories adhere to international standards and are members of the Responsible Jewelry Council. They also offer mobile and in-factory certification services and strive to improve service quality and agility. IGI has introduced co-branded certification reports to build brand equity and strengthen its position in the industry.
First mover advantage
IGI started offering certification in 2005 and has become the market leader with 65% of the market share. Their focus on innovation and customer relationships has improved the quality of their certification services. IGI is strategically present in key markets like India, the United States, and the PRC, where the PRC and India are the leading producers and the United States is the leading consumer. Their leadership position in India and global certification, coupled with their largest pan-India laboratory network, creates significant competitive advantages.
Range of services for certification and accreditation
IGI offers a comprehensive range of grading and classification services for various stone types, including natural diamonds, laboratory-grown diamonds, studded jewelry, and colored stones. They also provide value-added services like screening and detection of lab-grown and natural diamonds, sorting of diamond parcels, and audit and assurance services. IGI also offers education solutions through its IGI Schools of Gemology, and offers marketing support for certain customers and partners. Their technical capabilities enable them to certify diamonds and colored stones across various use cases, including studded jewelry sets and watches. They also provide certification services for each key stage in the value chain for polished and finished jewelry, including jewelry firms like Morellato and luxury groups.
Experienced management
The management team at the company is composed of professionals with extensive industry experience, including Tehmasp Nariman Printer, who has been recognized for his contributions to the loose stones and studded jewelry industry. Deborah Pienica, the global chief operating officer, has 22 years of experience and maintains relationships with global customers. The company is a portfolio of Blackstone, the world's largest alternative asset manager, and benefits from their resources, relationships, and expertise.
Risk Factors of International Gemmological Institute (India) Limited:
May face operational efficiency due to acquisition
As stated in the DRHP, the objective of fresh issue is to acquire the IGI Belgium and IGI Netherlands. The proposed acquisition and thereafter integration could lead to inconsistencies in standards, controls, or procedures. The management of personnel across multiple countries can present logistical, managerial, cultural and linguistic challenges. If the Company fails to achieve its business objectives, the anticipated benefits of the proposed acquisitions may not be realized fully or take longer or cost more than expected.
Revenue concentration
Ahead of the acquisition the company relies heavily on key customers for significant portion of the revenue. As can be seen from table below, top 10-15 customers generate around 50% of the revenue for the company. Loss of any of top customers or reduction in business activity from them could have negative impact for the company's operations, financial condition, and cash flows. The increase in revenue from laboratory-grown diamond certification has changed the mix of customers, with laboratory-grown diamond growers becoming more significant. If these requirements are not met, it could lead to decreased orders or business cessation.
| Revenue from Top Customers | 3-mon period ended Mar 31, 2024 | Dec, 31, 2024 | Dec, 31, 2023 | Dec, 31, 2022 |
| Top 10 customers | 48.95% | 40.69% | 33.94% | 23.63% |
| Top 15 customers | 55.25% | 46.46% | 39.98% | 29.01% |
Geographic concentration
The company generates majority of its revenue from business in India. From India too, two cities contributes around 80% of revenue from operation as can be seen from table below. Surat, a diamond trading center in Gujarat, and Mumbai, the capital city of Maharashtra, are the primary hubs of cutting and polishing diamonds.
| Revenue of certification business | 3-months period ended Mar 31, 2024 | Dec, 31, 2024 | Dec, 31, 2023 | Dec, 31, 2022 |
| India | 99.83% | 99.63% | 99.97% | 100% |
| Gujarat | 53.09% | 45.91% | 40.67% | 32.05% |
| Maharashtra | 38.96% | 43.32% | 46.63% | 54.82% |
| Rest of India | 7.77% | 10.39% | 12.68% | 13.14% |
| Turkiye | 0.17% | 0.37% | 0.03% | - |
International Gemmological Institute (India) Limited Grey Market premium
Grey market premium is the premium quoted over the IPO issue price. GMP shows that investors are ready to pay above the upper band of the IPO issue price. GMP is determined in the grey market as per the demand and supply of the shares in the primary market. A grey market is that unofficial ecosystem of unlisted companies' stocks that start trading even before the launch of the IPO to the date of its listing.
Also Read: What is Grey Market Premium in IPO: How is GMP Calculated & Reliable
However, GMP is not a reliable factor, as it keeps fluctuating as per the demand and supply of shares in the primary market. There are numerous factors that affect the stock market in India and individual stock prices of different companies that are already listed and trading in the secondary market. However, for an IPO-bounded company, you can consider the GMP as the speculative listing price of the share
According to various online sources, the Grey Market Premium or GMP of the International Gemmological Institute (India) is trading around Rs 130 in the grey market. It means shares are trading at the upper band issue price of Rs 545 with a premium in the grey market and may list around the same price.
