Gitanjali plans retail expansion, to upgrade facilities

Gitanjali Gems Limited (GGL), which has made its presence felt in the diamond jewellery market with such brands as Gili, Nakshatra, Asmi and D'Damas, has come out with an initial public offering (IPO).

The company plans to go on a high-profile retail expansion as well as upgradation and addition to its diamond processing and jewellery manufacturing facilities in the country.

Announcing the entry of GGL into the capital market, GGL vice-president (jewellery division) Anuj Rakyan said, "We cater to varied consumer segments in different retail formats. Our nationwide sales and distribution network consists of 26 exclusive distributors, 620 outlets including outlets in host stores, five stand-alone stores and 17 stores set up through franchisee arrangements spread across 30 cities and towns. Apart from expansion of retail outlets, we will upgrade our diamond cutting and polishing facilities at Mumbai and Surat besides jewellery manufacturing facility at Mumbai."

"By the end of December 2007, we will add another diamond processing and jewellery manufacturing facility at Mumbai and develop a diamond processing facility in the proposed special economic zone (SEZ) at Hyderabad by March 2007," Rakyan said.

The company plans to develop 75 acres of the allotted 200 acres in the SEZ in the first phase at an investment of Rs 50 crore.

Upen Shah, general manager, corporate finance, GGL, said, "We are expecting to raise about Rs 330 crore at the upper band of which 50 per cent will be spent on retail expansion, 25 per cent on upgradation and establishing diamond and jewellery manufacturing facilities and the balance on general corporate purpose and acquisitions."

Gitanjali Gems operations include sourcing of rough diamonds from primary and secondary source suppliers in the international market, cutting and polishing rough diamonds for export to international markets and manufacture and sale of diamond and other jewellery through their retail operations.

The public issue is of 1.7 crore shares of Rs 10 each through 100 per cent book building process. The price band is Rs 170 to Rs 195 per equity share. The issue, which opened today closes on February 21, 2006.