Gitanjali Gems buys out Gili, Modali Gems

Gitanjali Gems Ltd said on Thursday it had increased its stake in jewellery brand Gili to 100 percent from the earlier 65 percent and Modali Jewels Pvt. Ltd. (MGPL), with which it earlier had a joint venture.

Gitanjali Gems manufactures, exports and markets diamonds and jewellery and owns a number of well-known brands like D'damas, Nakshatra, Sangini and Asmi.

The Gili brand is currently valued at Rs85 crore and enjoys a 45 per cent market share among branded jewellery.

Gitanjali Gems plans to invest Rs50 crore in the brand in an effort to increase its market share to 75 per cent. It plans to include artistic cutwork jewellery and international jewellery brands Rosato and Calgaro brands under the Gili, and sell them through its 30 outlets.

Gitanjali's other acquisitions, Modali Jewels Pvt. Ltd. (MGPL), will become a fully owned subsidiary.

MGPL manages the distribution of the brand Asmi and allied products and employs 120 people, with 45 distributors and 345 retailers, Gitanjali says.

In January 2008, Gitanjali Gems had acquired 100 per cent shares of the Mumbai-based Brightest Circle Jewellery, which is engaged in manufacturing, distributing and selling of diamonds and jewellery products.

The company's net profit rose 20.70 per cent to Rs26.85 crores on a 19.80 per cent rise in net sales to Rs598.28 crores in the second quarter of 2007 over the same period in 2006.

The markets did not respond favourably to this announcement. On a day the benchmark indices ended flat, the Gitanjali Gems stock ended 3.33 per cent down at Rs.243.95.