The Rs 600 crore Flawless Diamonds Ltd (FDL) is planning to acquire a Dubai-based diamond jewellery distribution company to set a foothold in the world’s fastest growing precious metals trading centre. The cost of acquisition is estimated at around $3 million (Rs 100 crore).
“Currently talks are on to acquire this company which has a very strong distribution channel throughout Dubai and Europe. If plans goes favourably, all formalities for the acquisition would be completed by December this year,” said Rajeev Kamdar, director - Finance of the company without divulging name.
Post acquisition, we would be able to access not only Middle East markets efficiently but also highly remunerative markets like Turkey, Europe and USA, he added. Presently, the company’s presence in the Dubai market is limited through franchise route, with this acquisition it will able to sell products under its own brand “Aum”.
For the domestic market, the company proposes to add 2-3 retail shops every month. By the end of September, the company is planning to open three stores one each in Hyderabad, Gandhinagar (Gujarat) and Indore while it would open a store in Goa through franchise route with Bombay Store.
Additionally, the company is also planning to set up a state-of-the-art jewellery manufacturing unit in Mumbai at an investment of Rs 25-30 crore by the end of financial year 2009-10.
The proposed expansion would entail a capex, in addition to investment on acquisition in Dubai, of Rs 85 crore would entirely be funded through internal accruals.