International Gemmological Institute (India) Ltd. operations began in Belgium in 1975 with the establishment of IGI Belgium, and as of September 30, 2024, it has a global network of 31 branches equipped with IGI laboratories across 10 countries and 18 schools of gemology across 6 countries. In 2005, IGI was the first to issue certification reports for laboratory-grown diamonds globally.
- About
- Industry Overview
- Journey
- Board of Director
- Shareholding Pattern
- Proposed Acquisition
- Business & Services
- Natural vs. Lab-Grown Diamonds
- Revenue Segments
- Cost Structure
- Financials
- Management Discussion & Future Outlook
- Strengths & Weaknesses
(A) About International Gemmological Institute (India) Ltd.
International Gemmological Institute (India) Ltd. which was founded in 1999, was the first of its global peers to provide certification and accreditation services. As the region’s first international laboratory for diamonds, studded jewelry, and colored stones certification, the company has created strong client connections by focusing on service quality and a diverse range of goods. As an independent provider, it is a member of the International Gemological Institute group and is solely responsible for the IGI brand in India and Turkey.
(B) Industry Overview
Global Jewelry Market
- The global jewelry market categorizes products into three segments: gold, precious gemstones, based on aesthetic value, rarity, and price, and others, including platinum, palladium, silver, and semi-precious and non-precious stones.
- In 2023, the global jewelry market reached ₹26,600 billion. Since 2020. China, India and USA are the leading consumer Markets.
- It has rebounded, growing at a CAGR of 9%. However, over the long term, starting from 2019, the market has seen a more modest CAGR of 1%.
- From 2020 to 2023, gold jewelry grew at a strong CAGR of 18%, while diamond-studded jewelry expanded at a CAGR of 12% by 2023. Together, these two segments dominate 74% of the market.
Indian Jewelry Market
- In 2023, the Indian jewelry market was valued at around ₹5,300 billion. However, due to COVID-19 lockdowns, postponed weddings, and lower jewelry purchases, the market declined by 28%, dropping to ₹3,400 billion in 2020.
- After the pandemic, strong pent-up demand drove a steady recovery, with the market growing at a 16% CAGR from 2020 to 2023, reaching ₹5,300 billion.
- As the second-largest segment, diamond-studded jewelry accounted for around 7% of the market in 2019. Since then, it has grown rapidly, reaching approximately ₹780 billion by 2023, contributing about 15% to the overall market.
- In 2023, the organized market made up about 35% of India’s jewelry market, while local jewelers and goldsmiths dominated the rest. This is much lower compared to China and the USA, where organized players control 60% and 80% of the market, respectively.
- Rough diamond mining depends on available reserves, with production growing about 1% annually from 2010 to 2023. By 2028, output is expected to reach 105-120 million carats. In 2022, Russia, Botswana, and Canada produced about 68% of natural diamonds, with 35% originating from Russia. However, international sanctions due to the Russia-Ukraine war could disrupt the global supply of natural diamonds.
- Rough diamonds are sold through three main channels: tenders and auctions, long-term contracts, and spot market sales.
(C) Journey
(D) Board of Directors of International Gemmological Institute (India) Ltd.
(E) Shareholding Pattern of International Gemmological Institute (India) Ltd.
(F) Proposed Acquisition
Currently, IGI India, IGI Belgium, and IGI Netherlands are held by the promoter, BCP Asia II TopCo Private Limited. IGI Belgium and IGI Netherlands manage operations outside India and Türkiye, while IGI India oversees these regions. As part of the restructuring, IGI India plans to acquire 100% of IGI Belgium and IGI Netherlands, making it the sole global operator of the IGI business.
After completing the proposed acquisitions, IGI India will fully own the IGI Belgium Group and the IGI Netherlands Group. As a result, IGI India will take full responsibility for operating the IGI business globally.
(G) Business and Services of International Gemmological Institute (India) Ltd. | Stock Analysis
(i) Certification Business
The company certifies natural and lab-grown diamonds, studded jewelry, and colored stones by utilizing advanced technologies like spectrometers and microscopes. Moreover, It follows strict grading standards based on the 4Cs—Carat, Color, Clarity, and Cut—along with additional evaluations like fluorescence and symmetry. As a result, Certification reports provide detailed assessments, graphical representations, and laser inscriptions, ensuring transparency and added value for customers.
(ii) Laboratories Based Services
IGI provides digital solutions through its website and API, allowing customers and end-consumers to access grading reports via QR codes and track submission status. IGI also invests in research and development in gemology to enhance knowledge of diamonds and colored stones, improving its service offerings.
Services/Offerings of IGIL Ltd
a) Diamond Grading: IGI provides comprehensive diamond grading that includes the 4Cs (cut, color, clarity, and carat weight) for both natural and lab-grown diamonds, as well as information on fluorescence and symmetry. Screening and sorting services are also provided on request.
b) Evaluation of Colored Stone: IGI evaluates the quality and authenticity of colored stones, including rubies, sapphires, emeralds, and other precious and semi-precious stones, providing detailed grading reports on their characteristics.
c) Grading and assessment of finished jewelry: IGI grades and assesses finished jewelry pieces, evaluating the quality of diamonds, colored stones, craftsmanship, mounting, symmetry, and overall value.
d) Educational programs and courses: IGI offers educational programs in gemology, diamond grading, and jewelry design through its IGI Schools of Gemology. These courses educate industry professionals and enthusiasts, supporting demand for IGI’s certification services.
(H) Natural vs. Lab-Grown Diamonds
In 2023, global gem-quality rough diamond production was about 61 million carats. Lab-grown diamonds grew faster than natural diamonds, reaching around 11 million carats. This growth is expected to continue at 18-22% annually, reaching 25-30 million carats by 2028.
Rough diamonds are sold through three main channels which inculde tenders and auctions, long-term contracts, and spot market sales.
(I) Revenue Segments of International Gemmological Institute (India) Ltd.
(J) Cost Structure of International Gemmological Institute (India) Ltd.
(K) Financials of International Gemmological Institute (India) Ltd.
The company’s revenue has grown at a CAGR of 21.13% over the past 4 years, increasing from Rs 364.81 Cr in CY21 to Rs 785.42 Cr in CY24. Subsequently, the company’s PAT has also shown growth, rising from Rs 177.01 Cr in CY21 to Rs 439.25 Cr. in CY24 at a CAGR of 25.51%.
(L) Management Discussion | Stock Analysis
- IGI is the world’s second-largest independent certification and accreditation provider by revenue in 2023 for diamonds, studded jewelry, and colored stones, holding a 33% global market share based on the number of certifications issued.
- In the fast-growing laboratory-grown diamond certification segment, which saw a 19% CAGR from 2019 to 2023, IGI leads the market with 65% share based on certifications issued in 2023.
- As of September 30, 2024, IGI has served over 7,500 customers across 10 countries, building long-term relationships with leading jewelry brands and retailers.
- China, India, and the United States dominated the global jewelry market in 2023, accounting for 74% of total value. Looking ahead, by 2028, their combined share is expected to reach around 79%, primarily driven mainly by India’s rapid growth at a projected 12% CAGR, 2.5 times of the global jewelry growth rate.
- Rising disposable income in India are fueling rising discretionary spending, particularly among the middle classes. This trend favors industries such as jewelry, where purchases are frequently viewed as valuable investments.
- The rise of Western fashion trends has significantly increased demand for studded jewelry, which accounted for around 18% of the jewelry market in 2023. Looking ahead, this percentage may increase to 25-30% by 2028. Moreover, this trend reflects a cultural shift toward luxury and self-expression, ultimately fueling the appeal of studded jewelry.
- In 2023, lab-grown diamonds, priced 70-80% lower per carat than natural diamonds, driving market growth. Brands are emphasizing their similarity to natural diamonds, increasing client awareness. Direct-to-consumer LGD brands provide transparency and high-quality, affordable jewelry options.
- India is the world’s largest diamond cutting and polishing center, accounting for over 95% of all polished diamonds in 2023, driven by low labor costs and talented craftsmen, particularly in Surat. India also leading in rough diamond imports, accounting for 42% of global imports.
- China and India produced 80% of lab-grown diamonds in 2023, while the USA contributed 10%.
Future Outlook
- The overall global jewelry market will grow at a CAGR of 3 to 6%. Gold jewelry market will expand at a 5% CAGR, while diamond-studded jewelry is set to grow at 6% CAGR, by 2028.
- In 2019, gold dominated the Indian jewelry market, accounting for 87%. Between 2020 and 2023, it increased by 14% to almost ₹4,300 billion. However, its market share declined to 82% in 2023 as other jewelry categories gained popularity. By 2028, gold’s share may fall further to 70-75%, as demand for diamonds, platinum, and lab-grown gems continues to rise.
- The diamond-studded jewelry market will be a key growth driver for India’s jewelry industry, with a projected CAGR of around 20% from 2023 to 2028.
- India’s organized jewelry retail jumped from 2% in 2000 to 35% in 2023, as modern retailers replaced traditional jewelers with better shopping experiences.
(M) Strengths & Weaknesses
Strengths
(i) Market Leader in Independent Certification
IGI leads the independent certification market with a 50% share in diamond, studded jewelry, and colored stone certifications in 2023. Present in major markets worldwide, IGI serves a global customer base. Its strong brand, advanced equipment, and trusted partnerships create high entry barriers, reinforcing its industry leadership. Co-branded reports with key partners boost visibility and trust, driving IGI’s growth in the expanding certification market.
(ii) IGI’s Commitment to Quality and Ethical Standards
IGI certifies diamonds and jewelry in internationally accredited labs, including ISO/IEC 17025:2017 certified facilities in Surat and Mumbai. We uphold ethical standards as members of the Responsible Jewelry Council. Additionally, we offer mobile and in-factory services to meet growing customer demand and strengthen our market position.
Weaknesses
(i) Economic Fluctuations and Demand Sensitivity
IGI’s business depends on global and Indian markets for diamonds and jewelry. However, price fluctuations and economic downturns can reduce demand for certification, especially for lab-grown diamonds, potentially impacting profitability
(ii) Geopolitical Risks and Supply Chain Disruptions
IGI faces supply chain risks from geopolitical conflicts and Russia-Ukraine sanctions, which could raise diamond prices and reduce certification demand. Environmental concerns may also decrease demand for natural diamonds, impacting IGI’s business.
Drop us your query at – info@pawealth.in or Visit pawealth.in
References: Annual Reports, News Publications, Investor Presentations, Corporate Announcements, Management Discussions, Analyst Meets and Management Interviews, Industry Publications.
Disclaimer: The report only represents the personal opinions and views of the author. No part of the report should be considered a recommendation for buying/selling any stock. Thus, the report & references mentioned are only for the information of the readers about the industry stated.
Most successful stock advisors in India | Ludhiana Stock Market Tips | Stock Market Experts in Ludhiana | Top stock advisors in India | Best Stock Advisors in Gurugram | Investment Consultants in Ludhiana | Top Stock Brokers in Gurugram | Best stock advisors in India | Ludhiana Stock Advisors SEBI | Stock Consultants in Ludhiana | AMFI registered distributor | Amfi registered mutual fund | Be a mutual fund distributor | Top stock advisors in India | Top stock advisory services in India | Best Stock Advisors in Bangalore
