Gitanjali Gems to divest 25% in each brand

Gitanjali Gems, a leading branded diamond jewellery manufacturer and retailer, has planned to divest 25 per cent of its holding in each of its brands from September this year, to ‘unlock consumers’ acceptability level’.

Each of its brands is already formally a separate entity, each a registered company. Beginning with its leading brand, ‘Gili’, the exercise would move gradually into other brands, including ‘Nakshatra’, ‘Asmi’ and ‘D’Damas’, to complete the planned exercise by the end of financial year 2011-12. The plan is in a nascent stage, though, and is expected to be taken up at the company’s annual general meeting, scheduled next month.

The UK-based Brand Finance, in October 2009, valued the four leading brands of the company at Rs 514 crore (Nakshatra), Rs 468 crore (Gili), Rs 309 crore (D’Damas) and Rs 210 crore (Asmi), respectively. The purpose of this valuation was to understand customers’ acceptability of these brands and suggestions by the valuer to tighten any loopholes.

Stressing the need to conduct a brand valuation exercise, Mehul Choksi, managing director, said: “Having been the pioneer in establishing branded jewellery as a category in India 15 years ago, we felt a need to look back and take stock of where the brands stand at present.”

The valuations now show the brand’s presence and potential for further development, Choksi said.

“The valuer had suggested new designs, presence in bigger cities, etc, which (we) are currently undergoing. On implementing all the given suggestions, the brand value will double in two years and we are moving aggressively towards that,” he added.

When quizzed about the fund raising programme and its uses, Choksi said, “We will divest the minimum prescribed (by the valuer), perhaps at 25 per cent, with approval from the Securities and Exchange Board of India.”

Gitanjali is in the process of introducing 10 more brands this year, of which at least six are proposed to be evaluated by the same agency. Currently, Maya, Diya, Vivaah, Aastha, Lamhe, Nazar, Me, Kangan and Sangini are brands that enjoy significant market presence and are yet to be valued.