Rajesh Exports to raise debt for retail expansion

Rajesh Exports, the city-based publicly-held gold jewellery exporter and manufacturer, is looking at raising a debt of Rs 3,000 crore for expansion in the gold jewellery retail sector.

Over the next three years, the company will spend Rs 7,500 crore for the retailing arm, a majority of which will be to buy gold bars.

“We would raise debt close to Rs 3,000 crore for this expansion, while the rest will be equally shared between internal accruals and suppliers’ credit,” Chairman and Managing Director Rajesh Mehta said.

Rajesh Exports’ retailing arm has sales of around Rs 1,500 crore and is targeting to touch the Rs 5,000-crore mark during 2012-13.

The company, which is fast emerging as a strong competitor to Titan's gold jewellery retailing arm Tanishq, said in the next year it hoped to cross Tanishq’s revenues.

Rajesh Exports, which works on a wafer thin margin of one per cent, has been working on expanding its retailing arm, banking on the fact that it has better margins and has been looking at converting a host of local jewellers to be under their franchise.

The company, whose flagship exports business accounts for nearly 95 per cent of its topline of around Rs 20,000 crore, said it had bagged an export order worth Rs 631 crore from Excel Gold Smiths in Dubai. With this, the total order on hand is around Rs 4,700 crore. The company’s stock gained 4.67 per cent on the National Stock Exchange to close at Rs 137.80 on Tuesday.