The company filed for an preliminary public offering (IPO) in India on Aug. 22 and is now looking for to raise 42.25 billion rupees ($497 million), an increase from its preliminary goal of 40 billion rupees ($477 million).
IGI is anticipated to start out shopping for and promoting on Dec. 20, with IPO bids open from Dec. 13 by Dec. 17, primarily based on a purple herring prospectus filed Dec. 6.
The value ranges from 397 to 417 rupees per share with relatively rather a lot dimension of 35 shares.
The stock may very well be listed on the Nationwide Stock Commerce of India and the Bombay Stock Commerce.
Private equity massive Blackstone acquired IGI in May 2023 from a subsidiary of Chinese language language conglomerate Fosun and former CEO Roland Lorie, paying virtually $570 million for the lab.
Blackstone had been trying to find a valuation of $1.5 billion, per a Reuters report, nonetheless was in talks to take the lab as extreme as $3.5 billion.
This proposed IPO values IGI at spherical $2.1 billion.
In an interview with CNBC, IGI CEO Tehmasp Printer shared additional particulars regarding the upcoming IPO.
Following the IPO, Blackstone would go from holding a 100% stake throughout the lab to having a 76 p.c stake, he talked about.
“We’re very glad to have Blackstone help us,” he talked about. “I contemplate Blackstone is devoted for the next 10 years, which could moreover presumably be extended.”
The online proceeds from the IPO can be utilized for primary firm features and to amass the remaining glorious shares of IGI Belgium Group and IGI Netherlands Group from Blackstone.
“Proper now, we’re in consolidation mode. We now have taken the lead on lab-grown diamonds and we have to make IGI a worldwide entity,” talked about Printer.
Inside the prospectus, IGI highlighted its place as a result of the second-largest unbiased grading and accreditation suppliers provider on the earth, after the Gemological Institute of America, totally free stones and jewelry.
Based mostly by the Lorie family in Antwerp in 1975, IGI now operates 31 laboratories and 18 coaching facilities in diamond and jewelry services world large.
IGI’s share of the overall grading report market is spherical 33 p.c, talked about Printer, along with 20 p.c pure and 13 p.c lab-grown diamonds.
In India, IGI is the most important provider of these suppliers, holding 50 p.c market share, talked about the prospectus.
The rise in status of lab-grown diamonds has been partly behind its success, though its practices referring to the stones have raised some eyebrows throughout the enterprise.
As first reported by JCKOnline.com, IGI disclosed in its draft prospectus filed in August that loads of its lab-grown diamond grading is accomplished throughout the factories of the companies rising the diamonds.
IGI gemologists, along with staff of the diamond companies, do the grading and the diamond companies present the gear, a setup that, IGI acknowledged, comes with risks.
“As certification by the use of our in-factory and mobile laboratory setups are carried out on the premises of our shoppers, we might also have a lot much less oversight over third occasions who’ve entry to our shoppers’ premises,” the lab talked about in its August prospectus.
“Whereas we conduct top quality checks and periodic calibration of our gemologists to reassess and modify their grading strategies, such measures may not be environment friendly in stopping all conditions of grading errors or fraud by gemologists or third occasions.”
Printer was not requested about this in the midst of the CNBC interview nonetheless did discuss concerning the enlargement in consumer demand for lab-grown diamonds and their falling prices.
“Our progress worth has been immense the place lab-growns are concerned,” he talked about on CNBC. “It’s the new-age diamond. It’s the model new baby on the block and we’re sitting on the very best of it.”
The company moreover benefits from “economies of scale” when grading lab-grown diamonds, he talked about, that signifies that as the company grades additional lab-grown diamonds the worth to take motion decreases.
Referring to the sustainability of this earnings progress, Printer talked about it is sustainable due partly to the affordability of lab-grown diamonds, which has contributed to the market dimension “rising shortly,” and caught the attention of millennials and Gen Z.
Though the market dimension is also rising, the declining price of lab-grown diamonds has been a set off for concern throughout the enterprise.
The decline in prices should not harm its margins, he talked about, together with that prices have been safe for the ultimate 9 months or so, now at $200 to $250 per carat wholesale.
“Lab-grown producers and polishers have massive [capital expenditures] and [operational expenditures]. Proper now, the worth has stabilized to a stage the place I don’t suppose they’re going to go any lower. Then, it turns into unsustainable,” he talked about.