International Gemmological Institute (IGI) shares made a remarkable debut on December 20, 2024, listing with a 22% premium over its IPO price on the National Stock Exchange (NSE). The diamond grading firm’s stellar listing follows a robust response from investors, with its ₹4,225-crore public issue being oversubscribed by an impressive 34 times.
Impressive Listing Gains
The IGI stock opened at ₹510 per share on the NSE, a 22.30% premium over its issue price. The IPO was priced in a band of ₹397–₹417 per share. On the Bombay Stock Exchange (BSE), the shares debuted at ₹504.85, reflecting a 21.06% premium.
The strong listing propelled IGI’s market capitalization to ₹22,040.14 crore. This performance exceeded grey market expectations, where the stock had already generated significant buzz before its official debut.
Use of IPO Proceeds
IGI plans to utilize the funds raised through the IPO for the acquisition of IGI Belgium Group and IGI Netherlands Group from its promoters. A portion of the proceeds will also be directed toward general corporate purposes, strengthening the company’s financial position and fueling future growth.
Market Leadership and Growth Potential
IGI holds a dominant position in the diamond and gemstone certification market. The company commands a 33% share in the diamond certification space and an impressive 65% share in the laboratory-grown diamond segment. Operating under the ‘IGI’ brand in India and Turkey, the firm offers a range of grading and classification services for diamonds, jewellery, and coloured stones.
The company’s established presence and operational efficiency make it a compelling choice for investors looking to tap into the growing demand for certification services in the diamond and jewellery industry.
Analysts’ Views on IGI’s Long-Term Potential
Narendra Solanki, Head of Fundamental Research – Investment Services at Anand Rathi, expressed optimism about IGI’s long-term prospects.
“At the upper price band, the company is valued at a price-to-earnings (P/E) ratio of 43.75x. Post-issue, IGI’s market capitalization stands at ₹1,80,208 million, with an impressive return on net worth of 76.58%. The company’s established market leadership and robust financial metrics position it as a strong player in the industry,” Solanki noted.
He added that IGI is well-suited for long-term investors seeking steady returns, especially given the rising global demand for diamond and jewellery certification services.
Key Strengths of IGI
- Market Dominance: IGI is a leading player in the diamond certification market with a substantial share in both natural and laboratory-grown segments.
- Global Presence: The company operates across India and Turkey under its ‘IGI’ brand, providing internationally recognized certification services.
- Robust Financials: With a strong return on net worth and a well-capitalized balance sheet, IGI is positioned for sustained growth.
- Strategic Acquisitions: The planned acquisition of IGI Belgium and IGI Netherlands is expected to expand the company’s global footprint and operational capabilities.
Should You Buy, Sell, or Hold IGI Shares?
The strong listing gains make IGI an attractive proposition for investors. Analysts recommend holding the stock for the long term, citing its established market presence, high profitability, and growth potential in a niche but expanding industry.
However, given the premium valuation, some short-term profit booking might occur. New investors are advised to wait for price stabilization before considering an entry.
Conclusion
The successful listing of IGI shares highlights strong investor confidence in the company’s business model and growth trajectory. As the demand for diamond and jewellery certification services continues to rise, IGI is well-positioned to capitalize on market opportunities and deliver consistent returns to its shareholders.
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