International Gemmological Institute IPO day 2: GMP, subscription status to review. Apply or not? | Stock Market News

The diamond grading company International Gemmological Institute (India) Ltd (IGI), backed by Blackstone, opened for subscription on December 13 and its initial share sale will close on December 17. The firm has set a price range of ₹397-417 per share for its ₹4,225-crore initial public offering (IPO). If priced at the higher end of the range, the company’s market capitalization is estimated to exceed ₹18,000 crore. International Gemmological Institute (India) Ltd specializes in the certification and accreditation of natural diamonds, laboratory-grown diamonds, embellished jewelry, and colored stones.

IGI ranks as the second-largest independent provider of certification and accreditation services globally in terms of revenue for CY2023, focusing on certifications for diamonds, studded jewellery, and coloured stones, as noted in a Redseer report. The organization holds a global market share close to 33 percent among its international competitors.

International Gemmological Institute IPO Subscription Status

IGI IPO subscription status was 30% on the second day of subscription, at 10:54 IST, as per BSE data.

The initial share sale received bid for 1,74,15,440 shares against 5,85,60,902 shares on offer, according to BSE.

The segment allocated for retail investors saw a subscription rate of 1.16 times, whereas the non-institutional investors’ share was subscribed at 30%. The portion reserved for qualified institutional buyers (QIBs) is yet to be booked. Meanwhile, the employee allocation has been subscribed 3.81 times.

IGI IPO subscription status was 17% on the first day of subscription, as per BSE data.

International Gemmological Institute IPO Review

Bajaj Broking

The brokerage reported that over the past three fiscal years, the company has achieved an average EPS of Rs. 6.84 (basic) and an impressive average RoNW of 78.40%. The current issue is priced at a P/BV ratio of 25.71, which is calculated based on its NAV of Rs. 16.22 as of September 30, 2024. However, when considering the post-IPO NAV of Rs. 49.02 (at the upper cap), the P/BV ratio adjusts to 8.51. This indicates a significant disparity in valuation, suggesting potential for value appreciation in the post-IPO scenario.

“If we attribute FY25 annualized earnings to its post-IPO fully diluted paid-up equity capital, the asking price is at a P/E of 82.90. Based on FY24 earnings, the P/E stands at 110.90, suggesting that the issue appears fully priced,” said the brokerage.

Swastika Investmart

The brokerage reported that a well-known entity focused on the certification and evaluation of diamonds, gemstones, and jewelry. This firm is a leader in the global market. Steady advancement in financial indicators, highlighted by strong performance for the nine months concluding in September 2024. There are no directly listed competitors for comparison. This opportunity is appropriate for investors looking for both gains from the listing and the potential for long-term growth.

IGI IPO details

This IPO, valued at ₹4,225 crore, includes a fresh equity share issuance worth ₹1,475 crore and an Offer-for-Sale (OFS) of ₹2,750 crore from BCP Asia II TopCo Pte Ltd, an affiliate of Blackstone. The company intends to use the proceeds from the new equity issuance to acquire IGI Belgium Group and IGI Netherlands Group from the promoter, in addition to other general corporate needs.

The book running lead managers for the International Gemmological IPO are Axis Capital Limited, Kotak Mahindra Capital Company Limited, Morgan Stanley India Company Pvt Ltd, and SBI Capital Markets Limited, while Kfin Technologies Limited serves as the registrar for the offering.

International Gemmological Institute IPO GMP today

IGI IPO GMP today is +95. This indicates International Gemmological Institute share price was trading at a premium of ₹95 in the grey market, according to investorgain.com.

Considering the upper end of the IPO price band and the current premium in the grey market, the estimated listing price of International Gemmological Institute share price is indicated at ₹512 apiece, which is 22.78% higher than the IPO price of ₹417.

‘Grey market premium’ indicates investors’ readiness to pay more than the issue price.

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