Last Updated : 18 March 2010 at 13:10 IST

Shree Ganesh Jewellery's refinery biz to boost profit

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MUMBAI (Commodity Online): Shree Ganesh Jewellery House Ltd, a Kolkata-based gold jewellery maker is planning to raise Rs.360 crore through public issue to fund its expansion projects that includes manufacturing base in Manikanchan Special Eonomic Zone (SEZ) to meet the rising export demand.

The jewellery maker aims to utilize the funds raised from the upcoming initial public offering (IPO) for setting up two scrap gold refineries at its proposed jewejjery making facilities in Mandalpada and Donjur near Kolkata. Company aims to invest about Rs.90 crore in the two projects, each of which would have manufacturing capacity of one-two tonnes.

Company’s managing director Umesh Parekh had mentioned that company aims to set up a retail chain by processing scrap gold sourced from its own retail shops and serve them. The process would add at least three to five per cent to the company’s bottom line in next two years.

Primarily, these refineries will process scrap gold jewellery collected from all of company’s ten retail shops to produce pure gold. The capacities will be expanded later to process the additional scrap gold expected from a proposed 40 additional shops to be set up in two years. Company’s retail shops would facilitate as scrap collection centres, buying the yellow metal at the prevailing market price.

The company has made provision of Rs.50 crore to strengthen its retail presence across the country, specifically in Tier-I and -II cities.
The expansion at its manufacturing base in Manikanchan Special Economic Zone (SEZ) would be done with an investment of Rs 56 crore.
Company’s exports are focused on three major gold jewellery markets, Hong Kong, Singapore and Dubai. Nearly, 90% of the company’s turnover of Rs.2150 crore comes from these countries, while its retail operations contribute five per cent of it.

The price band of the upcoming public issue of the company has been fixed at Rs.260-270. The company had made this announcement on Wednesday, March 17, 2010.