International Gemmological Institute IPO - Should You Subscribe Or Avoid? Read DRChoksey's Analysis

Deven Choksey Research Report

International Gemmological Institute (India) Ltd. will launch its initial public offering on December 13 and the offer closes for subscription on Dec. 17. The leader in the global gem certification market has fixed the price band in the range of Rs 397 to Rs 417 per share.

The Rs 4,225-crore IPO comprises a fresh issue of shares worth Rs 1,475 crore along with an offer-for-sale component for Rs 2,750 crore.

The share allotment of the issue is expected to be finalised on Dec. 18.

Objects of the Offer

• Payment for acquisition.

• General corporate purposes.

Outlook and Valuation: International Gemmological Institute (India), a leader in the global gem certification market, operates an asset-light business model with advanced technological solutions and scalable infrastructure, enabling fast turnaround times and strong customer retention.

The company is well positioned in a fragmented market, benefiting from rising demand for lab-grown diamond certifications, growing discretionary spending in India, and the industry's focus on transparency and authenticity.

At the upper end of its IPO price band of Rs 417, the company is valued at 55.5 times P/E, the valuation looks attractive considering its strong market position, growth potential, and alignment with industry trends. The company is poised to benefit from the increasing demand for lab-grown diamond certifications, the growing discretionary spending in key markets like India, and the broader industry shift towards transparency and authenticity in jewelry.

The acquisition of IGI Belgium and IGI Netherlands offers growth opportunities despite the company’s lower 2.4% PAT margin compared to IGI (India)'s 50.9%.

Operational synergies and optimization are expected to enhance profitability, aligning the acquired entities closer to IGI’s high-margin operations and strengthening its long-term outlook. Given these factors, we assign a ‘Subscribe’ rating to the IPO.

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