Mehul Choksi’s Gitanjali Gems, an integrated diamond and jewellery maker cum retailer, has acquired Diamond Trading Company’s stake in Nakshatra.
Acquires 100% of jewellery brand; buys Brightest Circle too
MUMBAI: Mehul Choksi’s Gitanjali Gems, an integrated diamond and jewellery maker cum retailer, has acquired Diamond Trading Company’s stake in Nakshatra.
Gitanjali will now own full ownership of the premium jewellery brand. It earlier held a 33% stake.
The buyout is expected to cost between Rs 150 crore and Rs 200 crore, said sources. An official announcement is likely to be made on Tuesday.
When DNA Money contacted Choksi on Monday, he confirmed the Nakshatra acquisition. He, however, declined to give the deal size.
Simultaneously, Gitanjali, in a strategy to vertically integrate the business, has acquired Brightest Circle Jewelry. Brightest makes, distributes and sells diamonds and other jewellery products.
The Gitanjali chairman’s recent moves reveal his bullish confidence on the jewellery sector and his company Gitanjali.
In a little less than six months he has increased his stake from 37.38% to 40.36%. He has also raised $180 million through an overseas issue.
In the recent past, Gitanjali, through its subsidiary, signed up Italy’s Mariella Burani Group (MBFG) to form a joint venture.
The Nakshatra Brand is sold in over 200 outlets across India. The acquisition will increase the leverage for Gitanjali in its jewellery business share and give further impetus to its overall margins, said analysts.
In the fag end of 2005, Gitanjali got a grip on Nakshatra when it acquired a 33% stake in the brand. At that time DTC had put up four brands for sale - Nakshatra, Asmi, Sangini and Arisia -following its decision to sell of brands to clients who gave them maximum business.
Gitanjali used to derive marketing and advertising support from DTC for its jewellery brand. It remains to be seen whether this arrangement can continue.
It will buy the Nakshatra trade mark and its internet domain name through its wholly subsidiary Gitanjali Ventures DMCC, located in Dubai (UAE).
The Indian gems and jewellery industry has recorded a 21.5% growth in exports for first six months of 2007 to $9.38 billion.
r_mithun@dnaindia.net
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