The panic selling in jewellery stocks in the wake of the Government and RBI efforts to curb the import of gold seems to have eased with some of the jewellery retailer stocks in the green in the afternoon trade today.
However, Gitanjali Gems, for the third successive day hit the lower circuit with the stock falling to a fresh 52-week low, though who was behind the selling or the reasons for the hurry to exit from the stock, was not yet clear.
Curbing gold imports
To some extent, the gem and jewellery stocks were able to breathe easy after the clarifications from some of the prominent exporters explaining the impact of the move by GoI and RBI that wanted to rein in gold imports on industry players.
Rajesh Exports Ltd (REL) today said that the changes effected essentially related to increase in duty on import of gold for domestic consumption, banning the import of gold on consignment basis, permitting gold imports only on 100 per cent cash margin basis etc.
The company clarified that it did not import gold on consignment basis, did not avail any gold on loan basis and it imported gold against payment only. It also made much of its income from exports. It also passed on the duty hike on domestic gold to the retail consumers of SHUBH Jewellers and it did not shoulder the burden itself.
REL statement to the stock exchanges said that GoI and RBI policy changes aimed essentially at reducing the import of gold and the company itself never bought/imported gold on consignment/credit/loan basis.
The attempt by the company to put the issue in correct perspective appears to have soothed the nerves of investors in the stock which was trading in the green at Rs 118.95, a gain of 45 paise, on the BSE. In fact, the scrip touched a high of Rs 124.85 before easing a bit.
Shree Ganesh Jewellery House (I) Ltd, another major exporter of gold ornaments, was also able to halt the surge in sales in the stock. In fact, the stock gained Rs 3.65 to trade at Rs 79.30.
Stocks of a few of jewellery retailers were also trading in positive territory. Titan Industries Ltd was up marginally by 35 paise at Rs 229, Thangamayil Jewellery inched up by Rs 1.10 to Rs 201.10 and Tribhovandas Bhimji Zaveri gained Rs 1.55 to Rs 180.
However, shares of Gitanjali Gems continued to be hammered, with the stock losing Rs 32.40 or 9.99 per cent to trade at Rs 291.90, a fresh 52-week low on the BSE. There were 27.68 lakh shares on offer for sale with no buyers.