The much-anticipated International Gemological Institute (IGI) IPO is poised to make a notable entry into the stock market, with its grey market premium (GMP) signaling a promising debut.
Here’s a detailed look at the IPO’s specifics, market trends, and the potential long-term implications for investors.
IPO Overview: Price Band and Offer Details
The IGI IPO is set to open for bidding between December 13 and December 17, 2024, with shares expected to be listed on the BSE and NSE on December 20. Below are the key details:
- Price Band: Rs 397 to Rs 417 per share, with a face value of Rs 2 per share.
- Minimum Investment: Retail investors can bid for at least 35 shares, translating to an investment of Rs 14,595 per application.
- Issue Size: Rs 4,225 crore, comprising:
- Fresh issue of 3.54 crore shares worth Rs 1,475 crore.
- Offer for sale (OFS) of 6.59 crore shares aggregating Rs 2,750 crore by BCP Asia II.
Grey Market Trends: Indications of Strong Demand
The IPO’s GMP stood at Rs 100, implying a potential listing price of Rs 517—a 23.98% premium over the upper price band.
While the GMP has softened from its earlier high of Rs 145 on December 9, it still indicates robust demand in the grey market.
However, it’s essential to note that GMP is speculative and not an official indicator of the stock’s actual performance.
Key Players and Utilization of Proceeds
IGI India Ltd. has roped in Axis Capital Ltd., Kotak Mahindra Capital Co., Morgan Stanley India Co. Pvt., and SBI Capital Markets Ltd. as the book-running lead managers for the IPO, with Kfin Technologies Ltd. as the registrar. The proceeds from the issue will be utilized for:
- Acquiring a 100% stake in IGI Belgium Group and IGI Netherlands Group from the promoter, BCP Asia II (Rs 1,100 crore).
- Funding for general corporate purposes is approved by the board.
About International Gemmological Institute (India) Ltd.
Established as a key player in the gem and jewelry certification domain, IGI India Ltd. specializes in:
- Certification of natural and lab-grown diamonds, gemstones, and studded jewelry.
- Providing grading reports based on internationally recognized standards.
- Offering educational courses for gem and jewelry professionals.
Opportunities and Risks
Opportunities:
- Global Market Expansion: The acquisition of IGI Belgium and Netherlands groups positions the company to solidify its presence in international markets.
- Growing Demand for Certification: The rising trend of ethical sourcing and lab-grown diamonds drives the need for reliable certification services.
- Strong Financial Backing: Backed by Blackstone, a global investment leader, IGI benefits from strategic expertise and capital strength.
Risks:
- Market Volatility: IPO investments are subject to overall market sentiment, which can impact listing-day performance.
- Dependence on Key Markets: The company’s revenue is heavily reliant on specific regions, which could be a challenge during economic downturns.
- Regulatory Challenges: As a certification body, IGI must continually adapt to evolving international compliance standards.
Expert Insights: Long-Term Implications
The IGI IPO reflects the growing importance of certification in the jewelry sector, driven by consumer demand for transparency and quality assurance.
While the initial listing gains may appeal to short-term investors, the company’s strategic acquisitions and global reach provide a solid foundation for long-term growth.
Investors should evaluate their risk tolerance and consider the IPO’s potential in the context of broader market conditions.
Conclusion
The International Gemological Institute IPO presents an exciting opportunity for investors looking to tap into the growing demand for gem and jewelry certification services.
While the GMP signals a strong market debut, prospective investors must weigh the opportunities against potential risks and conduct thorough due diligence before placing bids.
Disclaimer: Investments in IPOs are subject to market risks. Please consult with financial advisors and review the red herring prospectus thoroughly before making investment decisions.
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