'Market for branded jewellery yet to mature in India'

Demand for jewellery in India is estimated at Rs 1 lakh crore and the demand for branded jewellery in the country is just three per cent of it.

Gitanjali Gems Ltd spends Rs 25 crore per year on publicity and marketing initiatives on its brands such as Nakshatra, D'damas, Asmi and Gili to increase the demand for branded jewellery in the country.

Addressing a press conference to announce the initial public offering of Gitanjali Gems, Anuj Rakyan, vice-president (jewellery division), Gijanjali Gems Ltd, said that the demand for diamond jewellery is 15 per cent of the total demand for jewellery in the country, gold jewellery having the highest demand.

"The branding of jewellery in India follows the pattern of the international market where 90 per cent of the jewellery is sold as a fashion accessory or as an everyday wear, not as an investment. Branded jewellery is therefore positioned as a lifestyle and personality statement. There has also been a shift in consumer preference towards diamond jewellery thanks to the extensive positioning of diamond jewellery as both affordable and contemporary", he said.

Gitanjali Gems entered the capital market on February 16, 2006, with a public issue of 17 million equity shares of Rs 10 each through 100 per cent book build process.

The price band is Rs 170 to Rs 195 per equity share. The company intends to use the net proceeds of the issue for the investment in subsidiaries, joint ventures and associate companies; capital expenditure for expansion of retail operations and setting up of a diamond manufacturing facility at the proposed Gems and Jewellery Special Economic Zone at Hyderabad.

Gitanjali Gems Consolidated results reported a net profit of Rs 10.2 crore. Its income from sale of products was Rs 1371.1 crore for the year ending March 31, 2005. The net profit increased to Rs 24.5 crore with a sales income of Rs 1,153 crore for the six months ending September 30, 2005.

Total expenditure declined to Rs 1,101 crore for the first six months of 2005-06, from Rs 1,330 crore on March 31, 2005.

G K Nair, director, Gitanjali Gems Ltd, said that the company had merged its subsidiaries such as Gemplus Jewellery India Ltd, Prism Jewellery Pvt and Giantti Jewels Pvt with effect from April 1, 2005.