Blackstone-owned IGI India to raise ₹4,000 cr via IPO; fund to be used for acquisition

International Gemmological Institute India (IGI India), a Blackstone portfolio company, has filed its Draft Red Herring Prospectus (DRHP) with capital market regulator Securities and Exchange Board of India (SEBI) to raise ₹4,000 crore via an initial public offering (IPO) route. The offer comprises fresh issue of equity shares worth ₹1,250 crore of face value of ₹2 each, and offer-for-sale of stock worth ₹2,750 crore by existing shareholders.

Under the OFS, promoter entity BCP Asia II TopCo Pte Ltd, an affiliate of funds managed and advised by Blackstone, is the solo seller, offloading shares worth ₹2,750 crore.

IGI India, is part of IGI Group, provides the fine jewellery community and consumers with a broad range of services including natural and laboratory grown diamond reports, coloured stone grading and origin reports, as well as jewelry identification and appraisal reports.

Blackstone had acquired the International Gemological Institute from Shanghai Yuyuan Tourist Mart (Group) Co., Ltd., a subsidiary of Fosun, and Roland Lorie, in May 2023. Founded in 1975 in Antwerp, IGI is a global leader in independent certification of diamonds, gemstones, and jewelry, with a global footprint of 31 laboratories and 18 schools of gemology across 10 countries. IGI is the world’s first gemological laboratory to hold ISO accreditation in both natural and lab-grown diamonds.

IGI India is the world’s second-largest independent certification and accreditation services provider based on revenue for CY2023 among global peers for diamonds, studded jewelry and colored stones certifications, according to the Redseer report mentioned in the DRHP. The company commands a global market share of 33%, based on the number of certifications for CY2023.

International Gemmological Institute India reported total income of ₹215.66 crore for the three month ended March 31, 2024, and ₹648.66 crore for the full year ended December 31, 2023. The company, which follows calendar year as fiscal, posted profit at ₹124.80 crore for March quarter of 2024, and ₹324.74 crore for the full CY23. The income has increased steadily from ₹499.33 in CY22 and ₹374.28 crore in CY21, while the profit has risen from ₹241.76 crore in CY22 and ₹171.53 crore in CY21.

IPO proceeds to be used for acquisition of IGI Belgium, IGI Netherlands

Out of ₹1,250 crore raised from fresh equities, ₹1,100 crore will be used for funding the acquisition of IGI Belgium and IGI Netherlands from promoter. The remaining capital will be used to meet general corporate purposes.

BCP Asia II TopCo Pte Ltd owns 100% stake in IGI Belgium and IGI Netherlands, which together with their respective subsidiaries, operate the IGI business outside of India and Turkey. IGI India entered into an agreement for the proposed acquisition with the promoter on August 22, 2024. The total enterprise value of the proposed acquisition stood at ₹1,294.84 as of March 31, 2024.

“We propose to utilise ₹1,1,00 crore from the net proceeds towards funding the proposed acquisitions and the balance will be funded from internal accruals. Accordingly, we confirm that there is no requirement for us to make firm arrangements of finance through verifiable means towards 75% of the stated means of finance,” the company says in the DRHP.

As on March 31, 2024, IGI Belgium Group has operations in Antwerp, Belgium, New York, USA, and IGI Netherlands Group has operations in Bangkok, Thailand, Dubai, UAE, Hong Kong and Shanghai, the PRC and in Israel and Egypt.

The proposed acquisition is intended to consolidate our global business under our company while continuing to leverage on our centralised management and simplify our group structure,” the IPO document noted.

Axis Capital Limited, Kotak Mahindra Capital Company Limited, Morgan Stanley India company private and SBI Capital Markets Limited are the book running lead managers to the issue.