Tehmasp Printer and Eashwar Iyer in Conversation: The Future of IGI
In a recent conversation with ET Now, Tehmasp Printer, Managing Director and CEO of IGI (India), and Eashwar Iyer, Chief Financial Officer, shared insights into the company’s strategic direction and the upcoming IPO. With a focus on consolidating their three verticals, they aim to create a unified IGI that leverages India’s strengths in diamond manufacturing and grading.
The Structure of IGI
IGI operates through three distinct verticals, each contributing to the overall revenue. Tehmasp Printer emphasized the importance of integrating these verticals to enhance operational efficiency. "We are an international body for certification of gemstones and diamonds," he explained. "Our certification process distinguishes between earth-mined and lab-grown diamonds, which is crucial given the price differential between the two."
The company has a long-standing presence in India, with Tehmasp having been with IGI for 25 years. He highlighted the need to merge retail operations with manufacturing to create a more cohesive business model. "This merger is vital for us as we aim to go global," he stated.
The Rationale Behind the IPO
Eashwar Iyer elaborated on why an IPO in India makes strategic sense. "India is the hub for diamond manufacturing and polishing, contributing around 75-76% of our group’s turnover," he noted. Listing in India allows IGI to tap into this robust market while also addressing the significant retail opportunities in the West, particularly in the U.S. and Europe.
The IPO is not just about raising capital; it’s a strategic move to fund acquisitions that will strengthen IGI’s global footprint. "We plan to integrate our Indian operations with our international strengths, particularly in retail markets," Iyer added.
Ownership and Future Prospects
Currently, IGI is owned by Blackstone, which is looking to offload its stake. Iyer clarified that even after the stake sale, Blackstone would retain a majority shareholding of around 76%. This ongoing relationship is expected to provide stability during the transition period.
Tehmasp discussed the rationale behind consolidating multiple arms, particularly in India and Turkey. "We want to unify our operations across the ten locations we operate in," he explained. This consolidation will facilitate better communication and alignment with retailer needs, ultimately enhancing the certification process.
Valuation and Growth Expectations
As for the future valuation of the consolidated entity, Iyer projected it to be around ₹18,000 crores post-listing. He also shared insights into the company’s financial health, noting an impressive EBITDA margin of 56% as of September. The rise of lab-grown diamonds is a significant factor driving growth in the industry, particularly in the U.S. market, where most lab-grown diamonds cut and polished in India are exported.
The Appeal of Lab-Grown Diamonds
Tehmasp highlighted the affordability of lab-grown diamonds, which are expected to attract a new consumer base. "We believe we are at the beginning of an exciting journey in the lab-grown diamond sector," he remarked. The dual focus on both natural and lab-grown diamonds positions IGI uniquely in the market, appealing to a broader audience.
Conclusion: A Bright Future Ahead
The conversation between Tehmasp Printer and Eashwar Iyer paints a promising picture for IGI as it prepares for its IPO and aims to consolidate its operations. With a strategic focus on integrating manufacturing and retail, coupled with the growing acceptance of lab-grown diamonds, IGI is poised for significant growth in the coming years. As they embark on this journey, their commitment to quality certification and consumer accessibility remains at the forefront of their mission.