International Gemological Institute IPO 2024: Should You Subscribe?

International Gemological Institute (India) Limited (IGI), a globally renowned name in diamond and gemstone certification, is launching its ₹4,225 Cr Initial Public Offering (IPO) from December 13 to December 17, 2024. With a strong presence in the jewellery and gemstone industry and a robust track record, IGI presents an exciting investment opportunity for those eyeing the growing luxury and lab-grown diamond markets.

Here are the 10 key things you should know before investing in the International Gemological Institute (India) Limited IPO:

What makes IGI a good investment opportunity? Unlock the IPO Jackpot: Tips to Get Your Allotment!🎟️

The Indian IPO market is thriving in 2024, marking a remarkable phase for investors and businesses alike. With established companies and rising startups going public, IPOs have become a gateway to exciting growth stories.

However, getting an IPO allotment can feel like winning a jackpot! 🎟️ The high demand means competition is tough, but don’t worry—there are smart ways to boost your chances. Let’s explore how you can navigate this IPO boom and secure your share of success!

What Is IPO Allotment? 🤔

IPO allotment is the process of distributing shares to investors after an IPO. The Registrar, in consultation with the Exchange, determines the allocation. The allotment status is usually announced 3-4 days after the IPO bidding period ends, and investors can check it on the registrar’s website.

The allotment depends on the demand for the IPO shares. If the IPO is oversubscribed (more bids than shares available), not all investors may receive shares. If the IPO is undersubscribed (less demand), all investors will get allotment.

Steps to Increase Your Chances of IPO Allotment 📈

Apply for a Single Lot 📝

A simple strategy is to apply for just one lot, which is the minimum number of shares you can request. In oversubscribed IPOs, SEBI ensures all retail investors have an equal chance, no matter how many lots they apply for. Applying for a single lot reduces the risk of rejection due to oversubscription.

Tips:
• Check Lot Size: Look at the IPO prospectus for the minimum lot size.
• Track Subscription: Monitor the subscription levels during the IPO period to see how high the demand is.

Use Multiple Demat Accounts 📂

Applying through multiple Demat accounts can increase your chances. You can legally apply through accounts belonging to family members or close friends, as long as each account has a unique PAN.

How to Do It:

Open Family Accounts: Encourage family members to open Demat accounts.

Track Applications: Ensure all information is correct to avoid rejections.

Select the Cut-Off Price 💰

Choosing the cut-off price when applying for an IPO shows your willingness to buy shares at the final price set by the company. This flexibility can improve your chances of getting an allotment, especially in oversubscribed IPOs.

Why It Works:

Increased Flexibility: Shows you’re open to the final price.

Reduced Risk: Minimizes the chance of rejection due to lower bids.

Avoid Last-Minute Applications ⏰

Applying at the last minute can lead to server overloads, technical glitches, or missing the deadline. To avoid these issues, apply early, preferably on the first or second day of the IPO subscription window.

How to Apply Early:

Set Reminders: Mark your calendar with IPO dates.

Use Pre-Apply Features: Some brokers offer pre-apply options to submit applications early.

Prevent Technical Rejections 🚫

Many applications are rejected due to technical errors like incorrect details or insufficient funds. Double-check all information before submitting your application.

Common Errors to Avoid:

Multiple Applications from the Same PAN: Only one application per PAN is allowed.

Incorrect Information: Ensure all details are accurate.

Insufficient Funds: Make sure your linked bank account has enough funds.

Invest in Shares of the Parent Company 🏢

Investing in the parent company of an IPO can sometimes increase your chances of getting shares in its subsidiaries’ IPOs. Companies often favor existing shareholders in their allotment process.

Open Accounts with Multiple Brokers 📊

Diversify your IPO applications by opening accounts with several brokerage firms. Each broker might have different allocation capacities, so applying through multiple brokers can increase your chances.

How to Diversify:

Open Multiple Accounts: Set up accounts with various brokers.

Compare Broker Services: Look into the reputation and performance of different brokers.

Engage Consistently with IPOs 🔄

Patience and persistence are key. Keep applying for IPOs regularly, even if your initial attempts are unsuccessful. Over time, you’ll improve your understanding of the process and increase your chances of success.

Stay Informed:

Track Upcoming IPOs: Stay updated on new opportunities.

Keep Applying: Consistent engagement will pay off in the long run.

I hope these tips help you navigate the IPO market more effectively! If you have any more questions or need further assistance, feel free to ask. 😊📈

International Gemological Institute (India) Limited is the second-largest independent certification provider globally for diamonds and jewellery. It offers certification for natural and lab-grown diamonds, coloured gemstones, and jewellery, adhering to internationally recognized standards.

IGI operates 31 laboratories across 10 countries, including key hubs like Surat, Mumbai, Antwerp, New York, and Hong Kong. The company’s expertise is in gem grading and education. Its established brand reputation makes it a frontrunner in a high-barrier industry, poised to benefit from the increasing demand for authenticated luxury goods.

What are the IPO dates, price band, and issue size?

Here are the essential details of the IGI IPO:

IPO Dates: December 13th – 17th, 2024

Listing Date: December 20th, 2024

Price Band: ₹397–₹417 per share

Total Issue Size: ₹4,225 Cr

Lot Size: 35 Shares

Face Value: ₹2 per share

Listing Exchange: BSE, NSE

Promoter: BCP Asia II TopCo Pte. Ltd.

What is the minimum investment for the IPO?

The minimum investment required to apply for the International Gemological Institute IPO is ₹13,895, based on the lot size of 35 shares at the lower price band of ₹397 per share. However, to increase your chances of allotment, we recommend applying at the upper price band, which would require ₹14,595 (35 shares at ₹417 per share).

What does the company do?

Founded in 1999, IGI is a global leader in certifying and grading diamonds, coloured gemstones, and jewellery.

Services: Certification and grading of diamonds, coloured stones, and jewellery; educational programs in gemology, diamond grading, and jewellery design.

Operations: A worldwide presence with laboratories and schools in major markets, including India, Belgium, and the U.S.

Clientele: Trusted by leading jewellery brands and manufacturers globally.

By offering independent certifications, IGI ensures authenticity, enhancing customer trust in luxury purchases.

What is the objective of the IPO?

The primary objectives of the IGI IPO include:

Funding the acquisition of IGI Belgium Group and IGI Netherlands Group from the promoter.

Supporting general corporate purposes.

This acquisition will consolidate IGI’s position as a global certification leader.

How much is reserved for retail and other investors?

The IPO allocation is structured as follows:

Qualified Institutional Buyers (QIBs): Up to 75%

Non-Institutional Investors (NIIs): At least 15%

Retail Investors: At least 10%

This allocation ensures balanced participation across investor categories.

What are the key strengths and risks?

Strengths:

A leader in the diamond and jewellery certification industry.

Expertise in the growing lab-grown diamond segment.

Strong global presence with established laboratories and education programs.

High entry barriers ensure limited competition.

Risks:

Dependence on the success of proposed acquisitions to maintain global operations.

Brand reputation is crucial; adverse publicity could impact demand.

Many operations are conducted on leased premises, posing risks if agreements are not renewed.

Valuation uncertainties for acquisitions may impact financial performance.

What is the financial performance of IGI?

IGI has demonstrated consistent financial growth over the years:

Period Ended	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021
Assets	₹603.2 Cr	₹409.03 Cr	₹319.69 Cr
Revenue	₹648.66 Cr	₹499.33 Cr	₹374.29 Cr
Profit After Tax	₹324.74 Cr	₹241.76 Cr	₹171.53 Cr

What is the allotment and listing timeline?

Basis of Allotment: December 18, 2024

Refund Initiation: December 19, 2024

Shares Credited to Demat Accounts: December 19, 2024

Listing Date: December 20, 2024

Should you invest in IGI’s IPO?

With its strong global presence, leadership in the diamond certification market, and robust financial performance, IGI presents a compelling investment opportunity. However, investors should be mindful of risks, including dependency on brand reputation, operational challenges, and valuation uncertainties related to their acquisitions.

As always, consider your risk tolerance and financial goals before investing in this IPO.

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