Rajesh Exports plans two overseas JVs

Rajesh Exports, the country's largest gold jewellery exporter, is in talks to acquire an equity stake in two gold mines based in South Africa and Australia. The company plans to invest $50-$60 million in the project.

"We are looking at a strategic alliance or a special purpose vehicle (SPV) venture with two mining companies in South Africa and Australia, listed on the New York Stock Exchange. This would enable us to become fully integrated down the value-chain, from mining to retailing," said chairman Rajesh Mehta.

The joint venture is likely to come through in the next six months to a year. Mehta said the Reserve Bank of India's (RBI) clearance on the export house's application as a nominated agency to import gold, provided for in the recent Foreign Trade Policy, is expected in two weeks. This, in turn, would speed up the process.

The company is considering all options for raising funds including taking on debt, selling promoters' stakes, issuing fresh shares, or a combination of all three. The promoters own 75 per cent, while the rest is publicly held.

In all, the company is planning to invest over Rs 800 crore in its total expansion over two years. It is also launching its own line of diamond jewellery apart from its gold jewellery, both locally and internationally in three months.

"We are currently not investing in cutting and polishing facilities, but are sourcing from well-known diamond merchants in Surat and Mumbai," said Mehta.

Rajesh Exports is also spreading its reach in the retail segment with its jewellery line and is investing approximately Rs 400 crore into the venture.

Mehta said the projects are expected to take the company's total income up to over Rs 4000 crore in the current financial year from Rs 3,050 crore last year. The net profit is also expected to touch Rs 30 crore from Rs 27.3 crore last year.