Malabar Gold to invest Rs. 7,000 crore on expansion.

Malabar Gold & Diamonds will invest Rs. 7,000 crore to expand its jewellery business over the next five years.

The company is hoping to grow its annual turnover to around Rs. 45,000 crore from the current fiscal Rs. 25,000 crore, by the year 2023. By then, the jewellery retailer also said, it plans to triple the number of outlets to around 750.

“The increasing shift from the unorganised sector, which constitutes around 70 per cent of the industry, to the organised sector due to GST has fuelled the demand for gold in India. Apart from this, we are also planning to expand to new countries,” said MP Ahammed, Chairman at Malabar Group.

The investment of Rs. 7,000 crore, out of which Rs. 4,000 crore will be invested in India and the rest outside the Indian market, will be raised through a combination of debt, internal accruals and new investors. The company also plans to augment its current base of 2,752 investors to 4,000 in five years.

Ahammed said the company will be issuing an initial public offering (IPO) soon, though he didn’t want to reveal any dates. He stated that this move would increase liquidity, apart from enhancing the transparency as “there is a certain identity associated with being a public limited company”.

The company, which is headquartered in Kozhikode, witnessed a 30-40 per cent dip in business because of the floods that ravaged Kerala. “Onam is otherwise the best season for sales in Kerala, but the business was bleak as most weddings and functions were hindered due to the floods,” said Ahammed. However, despite this setback, he is expecting a 30 per cent growth in sales from last year during this festival season, complete with Diwali related offers and deals.

HBL