FIIs pick up 7% stake in Gitanjali

A string of foreign institutional investors (FIIs), including Citigroup, Morgan Stanley, Goldman Sachs and BSMA, have picked up a combined stake of over 7% in Gitanjali Gems, a Mumbai-based diamonds and jewellery company. The four FIIs have bought the stake over the past few weeks by way of secondary market purchases. They invested Rs 114 crore to buy the equity through different block deals struck at prices ranging between Rs 208 and Rs 298 between July 9 and September 3 on BSE and NSE. “FIIs have been buying from the open market, but the promoters have not sold any stake in the company,” said Gitanjali Gems finance director GK Nair. Speaking about current plans, he said the company is in the process of setting up a special economic zone (SEZ) in Hyderabad and have also got permission to set up two more in Aurangabad and Nagpur in Maharashtra. Among the block deals, the biggest was struck on September 3 when Morgan Stanley bought 10 lakh shares at a price of Rs 298 for a consideration of nearly Rs 30 crore. A total of 44.25 lakh shares changed hands between the four FIIs and other investors during the period. Active FII interest pushed up the stock to a high of Rs 318 on August 30. In the past two months, the share price has jumped nearly Rs 100, or 50%. The scrip closed at Rs 298 on Tuesday. With the fresh acquisitions, total FII holding in Gitanjali is likely to have gone up from 10.7% as on June 30. Gitanjali Gems is an integrated diamond and jewellery manufacturing company and one of the largest manufacturers and retailers of diamonds and jewellery in India. Its operations include sourcing of rough diamonds from suppliers in the international market, cutting and polishing rough diamonds for export. It also manufactures and sells diamond and other jewellery through retail operations in India and abroad. The company recorded a 56% rise in net profit at Rs 32.8 crore while net sales improved 31% to Rs 654 crore during the quarter ended June 2007. Its net profit had jumped 71% to Rs 82 crore while sales increased 37% to Rs 2,219 crore in 2006-07.