Sky Gold and Diamonds Ltd. aims to increase the contribution of exports to its revenue to 25% over the next two years, according to Managing Director Mangesh Chauhan.
The jewellery manufacturer will achieve this goal by opening a subsidiary in Dubai as it expands its operations in the United Arab Emirates, the chief financial officer told NDTV Profit in a conversation on Wednesday.
"In India, there are premiums of $4 to $5 for exporting gold. We will pick gold in Dubai and send it to the parent company on a job-work basis. Then, we can sell it at the rate going in the Dubai gold prices," he said.
"We are at 8% to 9% and we are targeting, in the coming two years, to go up to 25% from exports," he said.
The CFO said this approach eliminates the need for customers to pay the dollar-based premium on making charges. By manufacturing in India on a job-work basis and selling at Dubai gold prices, the company aims to offer competitive rates and boost export volumes.
"When we have an office in the UAE, we can work from our parent company and that will help us to uh give the ground-level support and a good rate to the customer," he said.
Talking about the overall business, he outlined that the company is also expanding its "advanced gold business" where corporate customers provide the gold for manufacturing. This model reduces inventory funding requirements and is expected to account for 10% of its business within two years.
He noted that the company has expanded into studded jewellery, lab-grown diamonds and 18-carat gold products.
Recently, three promoters collectively offloaded a 4.97% stake in the company. Chauhan clarified that this was a strategic move to unlock value after years of focusing on company growth.
"We have not offloaded any shares in the last 20 years," he said. The stake was picked by institutional investors, including the Bank of India Mutual Fund.
"We don't want to offload anything in the coming two, three, or four years, on the promoter side,” he added.
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