Indian Gems, Jewelry Stocks Give Sparkle to Bourse

Diamond and jewelry firms are putting the sparkle into the Bombay Stock Exchange as investors note the rising demand in India for branded jewelry and soaring exports.

Stock prices of companies in the sector have risen an average of 11 percent in the past week and around 250 percent in the year to the end of August.

The high risers in the past week include Shrenuj & Co, Golkunda Diamonds and Jewellery, Flawless Diamond and Shyam Star Gems. In addition, Su-Raj Diamonds rose more than 8 percent yesterday (Monday) on its announcement that it would open a jewelry factory in the Cochin Special Economic Zone.

Foreign institutional investors have reportedly invested in firms such as Rajesh Exports and Goldiam International and Vaibhav Gems.

Foreign investors believe the gem and jewelry sector is one in which India has built a global reputation and has room to grow much further, particularly given its cheap labor and other costs and skilled workforce.

Gems and jewelry account for around 18 percent of India’s exports and both the industry leaders and the government want to see this figure rise to 20 percent in the coming years.

Exports rose to $15 billion in the 2004-2005 fiscal year and the country hopes to increase exports to around $20 billion by 2007.