Shanti Gold Eyes Capacity Expansion With IPO Proceeds To Tap Unorganised Market—Here's Why

Shanti Gold International Ltd. is positioned to scale up manufacturing capacity using proceeds from the initial public offering that saw high investor participation last month. "We are positioned to scale up manufacturing capacity due to our integrated system and we are eyeing the unorganised market," Chief Financial Officer Shriram Iyengar told NDTV Profit.

The IPO to raise up to Rs 360.11 crore through a fresh issue of shares saw bids amounting to Rs 14,791 crore. Shanti Gold stock made a debut on the exchanges at a 15% premium to its IPO price on Friday. The company plans to use Rs 46 crore for capital expenditure towards setting up a new manufacturing facility in Jaipur.

"Our current capacity utilisation is 58% and as the market and volume grow, it will scale up," the CFO said. The Indian gems and jewellery business has traditionally been fragmented, with consumers purchasing from family jewellers. The unorganised retail sector comprises 70% share of the total market, as per the IPO's offer documents.

Iyengar also said the company has a better margin play in the bridal jewellery segment compared to studded jewellery. There are also no plans to enter the fast-growing lab-grown diamond market.

Incorporated in 2003, Shanti Gold International is engaged in the business of manufacturing gold jewellery. The company manufactures high-quality 22kt CZ casting gold jewellery, specialising in design and production. The company has an in-house manufacturing setup for design, production, and packaging.