Rajesh Exports acquired Valcambi in an all-cash deal of $400 million on Monday.
Rajesh Exports Limited on Monday announced its 100% acquisition of Valcambi, the world's largest gold refinery in an all-cash deal of $400 million. Valcambi has, for the last three years, been producing over 900 tonnes of gold on an annual average, which means, that gold from the company alone could be enough to satiate India's annual average gold import which usually hovers around 800 tonnes.
Rajesh Exports also announced its plans of foraying into gold mining in the next 2-3 years. On a more immediate basis, the company will upgrade and expand its existing refinery at Rudrapur in Uttarakhand.
"In 1-2 years, we are planning to expand our refinery in Uttarakhand with world-class technology from Valcambi. This will be under the 'Make in India' initiative that help us in providing international raw material in the domestic market," Rajesh Exports' managing director Prashant Mehta said.
One of the main reasons for the acquisition cited by Mehta was to meet the raw material requirement, which is deemed difficult. "The consistent supply of raw material is a big issue. With this acquisition, there will be smooth supplies at lower prices," he said.
The acquisition will help boost revenues and profitability of Rajesh Exports in coming years, he added.
The company expects to become debt-free in four years, he added.
Going forward, Rajesh Exports said the company, which has a controlling market share (50%) in supplying raw materials to 14 states, is also planning to expand the number of stores under its retail brand 'Shubh' to 450 from the existing 82 in the next three years.
In Monday's trading session, Rajesh Exports' stock price rose to a high of Rs 549.95 a share, before closing at Rs 540.10, up 2.09% from previous day's close.
(With PTI)
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