International Gemmological Institute IPO Day 3 Highlights: Issue subscribed 33.78x on final day; check latest GMP

International Gemmological Institute IPO concluded with 33.78 times bids, with QIB portion subscribed the most. Here's how different quotas were booked:

QIB: 45.80x

NII: 24.84x

Retail Investors: 11.21x

Employees: 20.63

Overall: 33.78x 

Here is a look at the IPO's objective:

(a) Payment of the purchase consideration for the acquisition of IGI Belgium Group and IGI Netherlands Group from our Promoter; and

(b) General corporate purposes

International Gemmological Institute IPO was booked 33.65 times so far on the third and final day of the bidding process, with QIB portion booked 45.80 times, NII portion 24.75 times, and retail quota 10.60 times.

There shall be a lock-in of 90 days on 50% of the Equity Shares allotted to the Anchor Investors from the date of Allotment, and a lock-in of 30 days on the remaining 50% of the Equity Shares allotted to the Anchor Investors from the date of Allotment.

As of the date of this Red Herring Prospectus, International Gemmological Institute has one wholly-owned subsidiary, namely, IGI Turkey. The company said it does not have any associates or joint ventures as on the date of this Red Herring Prospectus.

The company was incorporated as ‘International Gemmological Institute (India) Private Limited’ at Mumbai, Maharashtra as a private limited company under the Companies Act, 1956, pursuant to a certificate of incorporation dated February 23, 1999, issued by the RoC. 

The company was subsequently converted into a public limited company and the name of was changed to ‘International Gemmological Institute (India) Limited’ and a fresh certificate of incorporation dated July 10, 2024 was issued by the RoC.

International Gemmological Institute IPO was subscribed 9.07 times so far on the third day of bidding as buying by QIBs gathered pace. Here's how different quotas were subscribed:

QIB: 7.41x

NII: 13.61x

Retail Investors: 7.16x

Employees: 14.99x

Overall: 9.07x

Axis Capital, Kotak Mahindra Capital Company, Morgan Stanley India and SBI Capital Markets are the book-running lead managers to the IPO. Meanwhile, Kfin Technologies is the registrar.

The brokerage said that over the past three fiscal years, the company has achieved an average EPS of Rs. 6.84 (basic) and an impressive average RoNW of 78.40%. The current issue is priced at a P/BV ratio of 25.71, which is calculated based on its NAV of Rs. 16.22 as of September 30, 2024. However, when considering the post-IPO NAV of Rs. 49.02 (at the upper cap), the P/BV ratio adjusts to 8.51. This indicates a significant disparity in valuation, suggesting potential for value appreciation in the post-IPO scenario. “If we attribute FY25 annualized earnings to its post-IPO fully diluted paid-up equity capital, the asking price is at a P/E of 82.90. Based on FY24 earnings, the P/E stands at 110.90, suggesting that the issue appears fully priced,” said the brokerage.

Major threats faced by the loose stones and studded jewelry certification industry are as follows:

Volatility in global diamond prices: Fluctuations in diamond prices, influenced by factors like supply, demand, and economic conditions, can impact the demand for certification services. During periods of low prices, demand for certification may decrease as traders and retailers become more price-sensitive.

Technological advancements in counterfeiting and synthetic production: Improved technologies in creating synthetic stones and treatments can make it increasingly difficult to distinguish between natural and lab-grown or treated diamonds. This necessitates significant investments in state-of-the-art equipment and highly trained personnel.

Reputation and Trust issues: Any incidents of fraud, inaccuracies in certification, or involvement in unethical practices can severely damage the reputation of certification bodies.

Technological disruption and automation: Advancements in AI, machine learning, and spectroscopy could lead to automated grading and identification, potentially reducing the need for human expertise and changing the dynamics of the industry.

Counterfeiting of coloured stone certificates: The presence of counterfeit certificates devalues the trust associated with genuine certifications. This necessitates continuous investment in advanced security features and anti-counterfeiting measures.

Advancements in coloured stone treatments and synthesis technologies: The continuous advancement of coloured stone treatment and synthesis technologies makes it challenging for laboratories like IGI to stay ahead of the curve in detecting new treatments and synthetic stones.

Economic downturns: Economic downturns, such as the one experienced during the COVID-19 pandemic, result in reduced disposable income, impacting luxury goods purchases, including jewellery. This can lead to a decline in demand for certification services, affecting IGI's revenue.

Geopolitical risk: Geopolitical risks and conflicts in diamond-producing, trading, or processing regions can disrupt the supply chain, making it difficult for IGI to access diamonds for certification. This can lead to delays in service delivery and potential loss of revenue.

Environment and ethical concerns: Concerns about the environmental and social impact of diamond mining could lead to a decrease in demand for natural diamonds and related services. Increased awareness of "blood diamonds" and ethical sourcing issues may further fuel this trend.

(Source: RHP)

BCP Asia II TopCo Pte. Ltd is the promoter selling shareholder in International Gemmological Institute IPO. It is looking to sell equity shares of face value ₹2 each aggregating up to ₹2750 crore.

The company has reported a consistent growth in financial metrics, including robust results for the nine months ending September 2024. The company has monopoly in busines as there is no listed peer for comparison. The company is a renowned name in the global merchandise also. So, it is a suitable investment option for both short term and long term investors.

International Gemmological Institute IPO got fully subscribed on the final day of bidding on Tuesday amid strong demand from NII and retail investors. Here's a breakdown of how different categories were subscribed:

QIB: 9%

NII: 1.38x

Retail Investors: 3.11x

Employees: 8.33x

Overall: 1x

Blackstone-supported diamond grading company International Gemmological Institute (India) Ltd raised ₹1,900 crore from anchor investors on Thursday, just a day prior to the start of its initial public offering for subscription. Notable investors include the Government of Singapore, ICICI Prudential Mutual Fund, Axis Mutual Fund, Abu Dhabi Investment Authority, Nomura, SBI Life Insurance, and SBI General Insurance, as indicated by a circular posted on the BSE's website.

The firm intends to use the net proceeds to finance various objectives, including the payment for acquiring IGI Belgium Group and IGI Netherlands Group from the Promoter, as well as for general corporate purposes.

Founded in February 1999, the International Gemmological Institute (India) Limited is a worldwide acknowledged entity that certifies and grades diamonds, gemstones, and jewelry. IGI delivers independent grading reports that assess and certify the properties of stones based on globally accepted standards. These reports provide information regarding the stone's color, cut, clarity, and carat weight. Additionally, IGI offers educational courses and degree programs for those in the gem and jewelry industry and has a dedicated research department.

The company’s strategic presence and leadership in India’s laboratory network provide a competitive edge both nationally and internationally. The issue is valued at a P/E of 51.0x on the upper price band based on CY23 earnings, which is fairly valued. Therefore, we recommend a “SUBSCRIBE” rating for this issue with a medium to long-term investment perspective.

International Gemmological Institute IPO GMP today is +125. This indicates International Gemmological Institute share price was trading at a premium of ₹125 in the grey market, according to investorgain.com.

Considering the upper end of the IPO price band and the current premium in the grey market, the estimated listing price of International Gemmological Institute share price is indicated at ₹542 apiece, which is 29.98% higher than the IPO price of ₹417.

After analyzing the grey market activities from the past 11 sessions, the present GMP ( ₹125.) indicates a downward trend. The minimum GMP recorded is ₹75, while the maximum reached ₹145, as noted by experts at investorgain.com.

'Grey market premium' indicates investors' readiness to pay more than the issue price.

International Gemmological Institute IPO Day 2 Live Updates: As of December 16, the grey market premium (GMP) for the International Gemmological Institute public issue is at ₹115 per share. 

With the upper price band for the IPO at ₹417 per share, the shares are expected to be listed at ₹532 per share, a premium of 27.58%. 

Grey market premium (GMP) is an indicator which shows investor's willingness to pay more for a public issue. 

International Gemmological Institute IPO was subscribed 72% at the end of the second day of the bidding process. Here's how different quotas were booked:

QIB: 9%

NII: 83%

Retail Investors: 2.44x

Employees: 6.70x

Overall: 72%

An aggregate of 20% of the post-Offer Equity Share capital of our Company held by our Promoter shall be locked in for a period of 3 years as the minimum Promoter’s contribution (“Minimum Promoter’s Contribution”) from the date of Allotment or such other period as may be prescribed under the SEBI ICDR Regulations. The shareholding of the Promoter in excess of 20% of the post-Offer Equity Share capital shall be locked in for a period of one year from the date of Allotment or such other period as may be prescribed under the SEBI ICDR Regulations.

International Gemmological Institute's top 10 customers contributed 41% of the revenue as of 2023, while this increased to 44% in the first nine months of FY25.

Here's how different quotas are subscribed:

QIB: 4%

NII: 62%

Retail: 2.11

Employee: 5.81

Overall: 58%

There are no listed companies in India or internationally among IGI’s global peers, as per the company's RHP.

International Gemmological Institute IPO was subscribed 50% so far on the second day, thanks to strong interest from retail investors, whose quota was subscribed 1.91 times. The NII portion was booked 53% and the QIB portion 1%.

QIB investors started to bid for the International Gemmological Institute IPO on the second day, with their quota subscribed just 1% so far. Before this, no bids were received from QIB investors.

The global jewelry market stood at ~INR 26,600 billion (~USD 320 billion) in CY 2023. Since CY 2020, the market has rebounded, achieving a Compound Annual Growth Rate (“CAGR”) of ~9%. Over the longer term, from CY 2019 onwards, it has experienced a CAGR of 1%. Post-COVID-19, gold and diamond-studded jewelry markets grew at a CAGR of 18% and 12%, respectively, from CY 2020 till CY 2023; they are currently the two largest contributors, constituting a 74% market share. The global jewelry market is expected to grow at a CAGR of 3-6% in value terms from CY 2023 till CY 2028, with the gold and diamond-studded jewelry market expected to grow at a CAGR of 5% and 6%, in value terms, respectively, over the same period.

International Gemmological Institute IPO was subscribed 45% so far on second day of the bidding process. A look at how different quotas were subscribed:

QIB: NIL

NII: 48%

Retail Investors: 1.75x

Employees: 5.12x

Overall: 45%

The company posted a revenue of ₹638.52 in FY23 as against ₹490.99 crore in FY22. Meanwhile, profit rose to ₹324.7 crore in FY23 from ₹241.7 crore in FY22.

International Gemmological IPO has a lot size of 35 shares. Retail investors need to invest at least ₹14,595 for one lot of the IPO.

IGI provides independent grading reports that analyze and certify the characteristics of stones using internationally recognized standards. These reports include details about the stone's colour, cut, clarity, and carat weight.

It has 18 gemology schools that graduate thousands of students each year. IGI also offers education courses and degree plans for the gem and jewellery trade and has a research department.

IGI operates 31 laboratories worldwide that grade finished jewellery, natural diamonds, lab-grown diamonds, and gemstones.

International Gemmological Institute IPO subscribed 36% so far on Day 2 of the bidding process on Monday. Here is a breakdown of how different quotas were subscribed:

QIB: NIL

NII: 37%

Retail: 1.43 times

Overall: 36%

• Company do not have exclusive or long-term contracts with customers.
• Company relies significantly on information technology systems for the business and operations.
• Faces competition globally in the business
• Requires certain approvals and licenses in the ordinary course of business

• World’s second largest independent certification and accreditation services provider among our global peers for loose stones and studded jewelry and in an industry characterized by barriers to entry
• First mover and global market leader in providing certification services for the fast-growing laboratory grown diamond industry
• Extensive range of services for certification and accreditation services provided to a diverse group of customers along the value chain
• Education initiatives that support spreading awareness, building customer partnerships and our brand
• Demonstrated track record of delivering growth in revenue, margins and returns
• Experienced professional management team backed by the largest alternate asset manager globally
  (Source: RHP)

IGI is a renowned organization specializing in the certification and grading of diamonds, gemstones, and jewelry. The company holds a leadership position in the global market. It has shown consistent growth in financial metrics, including robust results for the nine months ending September 2024. The IPO is suitable for investors seeking both listing gains and long-term growth potential.

International Gemmological Institute IPO's retail portion was fully subscribed on Day 2 of the bidding. As of 10.45 am, retail portion was subscribed 1.07 times with the overall IPO booked 27%.

The IGI IPO consists of fresh issue of ₹1475 crore and OFS of ₹2750 crore. Overall, the company is looking to raise ₹4225 crore.

The company plans to use the fresh proceeds from the IPO for payment of the purchase consideration for the acquisition of IGI Belgium Group and IGI Netherlands Group from the Promoter and general corporate purposes.

International Gemmological Institute IPO subscribed 24% so far on Day 2 with retail portion close to the full subscription mark. Here are the details:

QIB Portion: NIL

NII Portion: 22%

Retail Investor Portion: 95%

Overall: 24%

The second day of bidding kicked off for International Gemmological Institute IPO. Investors can place their bids for the IPO now. The issue was subscribed 17% at the end of Day 1.

IPO Open Date: Friday, December 13, 2024

IPO Close Date: Tuesday, December 17, 2024

Basis of Allotment: Wednesday, December 18, 2024

Initiation of Refunds: Thursday, December 19, 2024

Credit of Shares to Demat: Thursday, December 19, 2024

Listing Date: Friday, December 20, 2024

The initial public offering of International Gemmological Institute (India) Ltd was 17% subscribed on its first day of the share sale on Friday. According to NSE data, the IPO received bids for 98,72,800 shares out of the 5,85,60,902 shares available for sale. The retail investor portion saw a 70% subscription, while the non-institutional investor segment was 14% subscribed.

International Gemmological Institute (India) Ltd, backed by Blackstone, raised ₹1,900 crore from anchor investors on Thursday, ahead of its initial public offering (IPO). 

Notable investors include the Government of Singapore, ICICI Prudential Mutual Fund, Axis Mutual Fund, Abu Dhabi Investment Authority, Nomura, SBI Life Insurance, and SBI General Insurance, as per a circular posted on the BSE website.

The company allocated around 4.56 crore equity shares to 68 funds at ₹417 per share, the highest price in the price band, bringing the total transaction value to ₹1,900.34 crore.

International Gemmological Institute IPO GMP today is +95. This indicates International Gemmological Institute share price was trading at a premium of ₹95 in the grey market, according to investorgain.com.

Considering the upper end of the IPO price band and the current premium in the grey market, the estimated listing price of International Gemmological Institute share price is indicated at ₹512 apiece, which is 22.78% higher than the IPO price of ₹417.

After analyzing the grey market activities from the past ten sessions, the present GMP ( ₹95) indicates a downward trend. The minimum GMP recorded is ₹75, while the maximum reached ₹145, as noted by experts at investorgain.com.

'Grey market premium' indicates investors' readiness to pay more than the issue price.

Disclaimer: The views and recommendations above are those of individual analysts, experts and broking companies, not of Mint. We advise investors to check with certified experts before making any investment decision.