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%