International Gemological Institute IPO: A Precious Investment Opportunity?

The International Gemological Institute (IGI) IPO is set to open for subscription from December 13, 2024, to December 17, 2024. With a price band of ₹397 to ₹417 per share and a total issue size of ₹4,225 crore, this IPO has captured significant attention in the financial market. Let’s delve into the details of this IPO, analyze its financial performance, and evaluate whether it’s worth your investment.

International Gemological Institute IPO Details

The IGI IPO is a mix of fresh issues and an offer for sale. Here are the key details:

• IPO Opening Date: December 13, 2024
• IPO Closing Date: December 17, 2024
• Listing Date: December 20, 2024
• Face Value: ₹2 per share
• Price Band: ₹397 to ₹417 per share
• Lot Size: 35 shares
• Total Issue Size: ₹4,225 crore
• Fresh Issue: ₹1,475 crore
• Offer for Sale: ₹2,750 crore
• Issue Type: Book Built Issue IPO
• Listing At: BSE, NSE
• Promoter: BCP Asia II TopCo Pte. Ltd
• Shareholding Pre-Issue: 100%
• Shareholding Post-Issue: 76.55%

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Lot Size and Investment Details

Investors can bid for a minimum of 35 shares and in multiples thereof. Below are the minimum and maximum investment options:

• Retail (Minimum): 1 lot (35 shares) – ₹14,595
• Retail (Maximum): 13 lots (455 shares) – ₹189,735
• S-HNI (Minimum): 14 lots (490 shares) – ₹204,330
• S-HNI (Maximum): 68 lots (2,380 shares) – ₹992,460
• B-HNI (Minimum): 69 lots (2,415 shares) – ₹1,007,055

About International Gemological Institute (IGI)

Established in 1975 in Belgium, International Gemological Institute (IGI) is a global leader in certification and accreditation services for natural diamonds, lab-grown diamonds, studded jewelry, and colored stones. IGI also offers educational programs in gemology. As of September 30, 2024, IGI operates a vast network of 31 laboratories in 10 countries and 18 schools of gemology across 6 countries. With over 7,500 customers worldwide, IGI has established itself as a trusted name in the industry.

India’s Role in IGI’s Operations

India is the world’s largest hub for cutting and polishing diamonds, contributing significantly to IGI’s revenue. In CY2023, IGI India held a 50% market share in the certification industry, cementing its dominance in the region.

Promoter and Global Backing

The promoter of IGI is BCP Asia II TopCo Pte. Ltd., a portfolio company of the US-based Blackstone Group. Blackstone, the world’s largest alternative asset manager, brings immense credibility and strategic expertise to IGI’s operations.

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Financial Performance

IGI’s financial performance over the last three years demonstrates robust growth:

• Revenue:
• 2021: ₹365 crore
• 2022: ₹491 crore
• 2023: ₹639 crore
• Total Assets:
• 2021: ₹320 crore
• 2022: ₹409 crore
• 2023: ₹603 crore
• Profit:
• 2021: ₹172 crore
• 2022: ₹242 crore
• 2023: ₹325 crore

Key Performance Indicators (KPIs)

As of December 31, 2023, IGI’s KPIs are as follows:

• Return on Equity (ROE): 76.58%
• Return on Capital Employed (ROCE): 80.96%
• Return on Net Worth (RoNW): 76.58%

These metrics highlight IGI’s exceptional profitability and efficient use of capital.

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Use of IPO Proceeds

The funds raised through the IPO will be utilized as follows:

• ₹1,100 crore for acquiring IGI Belgium Group and IGI Netherlands Group from its promoter.
• Remaining proceeds for general corporate purposes.

Strengths of IGI

1. Market Leadership: IGI is the second-largest global player in the certification industry, with a 33% global market share in CY2023.
2. Strong Promoter Backing: Blackstone’s involvement adds strategic value and credibility.
3. Global Network: IGI’s presence in 10 countries ensures diversified revenue streams.
4. High Profitability: With impressive ROE and ROCE metrics, IGI demonstrates strong financial health.
5. India’s Diamond Hub: Leveraging India’s dominance in diamond processing provides IGI a competitive edge.

Concerns and Risks

1. Dependency on Diamonds: IGI’s heavy reliance on the diamond and jewelry industry exposes it to market fluctuations.
2. Offer for Sale Component: A significant portion (₹2,750 crore) of the IPO is an offer for sale, meaning no direct benefit to the company’s operations.
3. Competitive Market: The certification industry faces intense competition, which could impact market share and profitability.

Registrar and Contact Details

Investors can reach out to the IPO registrar, Kfin Technologies Limited, for any IPO-related queries:

• Phone: 040-6716 2222 / 040-7961 1000
• Email: igil.ipo@kfintech.com
• Website: Kfin IPO Status

For further information, contact IGI directly:

International Gemological Institute (India) Ltd
Website: www.igi.org

Should You Invest in the IGI IPO?

The International Gemological Institute IPO offers a unique opportunity to invest in a global leader with strong financials and market presence. The backing of Blackstone adds a layer of confidence, and IGI’s leadership in the diamond certification industry positions it well for future growth. However, investors should consider the risks associated with the dependency on a specific market segment and the significant offer-for-sale component.

Retail and HNI investors looking for a long-term investment in a high-growth industry may find IGI’s IPO a valuable addition to their portfolio. Stay updated on subscription trends and final pricing before making a decision.

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