• Investment World
• eWorld
• Brand Line
• Mentor
• Life
• Canvas
• Praxis
• Urban Pulse
• Brand Quest
• The New Manager

Stocks

• Quotes
• SE Diary
• Scoreboard
• Open-End Mutual Fund

Cross Currency

• Rates
  
  

Shipping

• Ports
  
  

Archives

• Yesterday
• Datewise
• Resources
• In Focus
• In Depth

Group Sites

• The Hindu
• The Hindu ePaper
• Business Line
• Business Line ePaper
• Sportstar
• Frontline
• The Hindu eBooks
• The Hindu Images

Our Bureau

Mumbai, Sept. 5 With FII majors such as Citigroup, Morgan Stanley, Goldman Sachs and BSMA picking up a combined stake of over seven per cent in Gitanjali Gems, a Mumbai-based diamonds and jewellery company, the gems and jewellery industry is turning out to be the next destination of the FIIs. The four FIIs have bought the stake over the past few weeks by way of secondary market purchases. They invested around Rs 114 crore to buy the equity.

Earlier this week, Goldman Sachs, UBS have bought 6.28 per cent stake in Shrenuj& Company, a diamond and jewellery manufacturing company.

“At this point of time, the FIIs probably saw some value in this industry and have put their money into it,” says Mr V.K Sharma, Head of Research, Anagram Stock broking.

The structure of the industry seems to be changing with more and more family run businesses getting into corporate mould.

“The gems and jewellery industry is going through a transformation phase and consolidation is happening, which might be one of the factors why FIIs are seeking to come in this industry,” says Mr Lalit Thakkar, Head of Research, Angel Broking Ltd.

Gitanjali Gems has retail outlets across the country, whereas Shrenuj has retail outlets in India and many other countries.

“Earlier they were pure play manufacturing industries now they are getting into branding and retailing,” says Mr Ashish Dangi, FMCG/Lifestyle, Pink Research.

“We should not look at the quantum of the amount of stake invested because earlier this industry was suffering form credibility issues and that is getting addressed so the transformation is happening slowly,” says Mr Dangi.

In 2005, it was Vaibhav Gems which allotted 27 per cent of its stake to Cortland Investment, a Warburg Pincus Group Company.

“FII inflow will enable the industry to monetise itself. This will certainly give boost to the industry which is just beginning to corporatise,” says Mr Arvind Pradhan, Executive Director, Gem & Jewellery Export Promotion Council. “This industry is hit by the rupee appreciation so we can expect that with FII coming in the situation will improve,” says Mr Sharma.

More Stories on : Foreign Institutional Investors | Gems & Jewellery

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
State Bank of Patiala offers e-trading

Copyright © 2007, The Hindu Business Line. Republication or redissemination of the contents of this screen are expressly prohibited without the written consent of The Hindu Business Line