International Gemmological Institute (India) Ltd, a diamond certification company controlled by private equity firm Blackstone, made a strong stock market debut on Friday with its shares listing at a 21% premium to their issue price before losing some gains.
Shares of IGI India began trading on the BSE at Rs 504.85 apiece, compared with the initial public offering price of Rs 417, stock-exchange data show. The shares touched a high of Rs 525 and a low of Rs 454.55 before ending the day at Rs 470.15, clocking a gain of 12.7% on its first day of trading. The company now commands a market value of Rs 20,318 crore ($2.4 billion).
The debut comes after the company’ IPO was covered 33.78 times, with institutional investors bidding for 45.80 times their quota and retail investors placing bids for 11.21 times the shares set aside for them.
IGI hit the street with its Rs 4,225-crore IPO ($498 million) on Dec. 13. The IPO closed on Dec. 17. It included a fresh issue of shares by the company to raise Rs 1,475 crore and an offer for sale by Blackstone to mop up Rs 2,750 crore. Blackstone fully owned IGI India before the IPO. Its stake diluted to 76% after the IPO.
Ahead of the IPO, three sovereign wealth funds—Norway's Government Pension Fund Global, Singapore’s GIC and the Abu Dhabi Investment Authority—invested a total of Rs 430 crore in IGI India as part of the anchor investors’ portion.
IGI India had increased the size of the fresh issue from the Rs 1,250-crore the company proposed when it filed draft documents for the IPO in August. Blackstone didn’t change the size of the offer-for-sale portion. IGI India will use Rs 1,300 crore raised through the fresh issue to buy IGI Belgium and IGI Netherlands from Blackstone at a total cost of Rs 1,324.46 crore. In the draft documents, the company had proposed to pay Rs 1,100 crore for the two acquisitions.
This essentially means that Blackstone will get the entire Rs 4,225 crore being raised in the IPO.
Blackstone bought IGI’s business globally in May last year from China’s Fosun and the Lorie family that founded the company. The PE firm hadn’t disclosed the deal value but media reports pegged it around $530 million, or Rs 4,348 crore at the time. The IPO documents show that it spent Rs 3,228 crore, or $393 million at the time, to buy IGI India.
In effect, this means that Blackstone is taking out almost the entire principal amount it had invested just one-and-a-half years ago to buy IGI’s global business by selling part of its stake in the India unit alone.
VCCircle previously reported that Blackstone, the world’s biggest PE firm, churned out spectacular returns through the quick partial exit from IGI India.
IGI was founded in Antwerp about 50 years ago. It operates 31 laboratories and 18 gemology schools globally, most of which are in India. For the nine months ended September 30, IGI India reported revenue from operations of Rs 596.3 crore and Rs 326 crore in net profit. For 2023, it had reported Rs 638.5 crore in revenue and Rs 324.7 crore in net profit. The company follows a January-December financial year.
