MMTC’s plan to launch its own jewellery brand comes at a time when Indian jewellers are waking up to the potential of branded jewellery, but will the dream bear fruit?
The government undertaking Minerals and Metals Trading Corporation of India Ltd (MMTC), which is the biggest bullion trader in India, has announced its plans to launch its own jewellery brand. MMTC already has a silverware retail arm called Sanchi, and plans to have 30 more outlets across India for its new brand. While sentiments are buoyant, it remains to be seen whether the scheme becomes a success.
The announcement comes at a time when the market is booming, and sector commentators feel that with increasing disposable income of the middle class, there is an immense scope for branded jewellery. "Gold and jewellery are traditionally considered to be sound investments. The World Gold Council is optimistic about the future. Platinum and diamond are also catching up. Even during the recession, the domestic demand did not wane. With the number of earning youths going up, branded jewellery will definitely do well," an analyst told Moneylife.
However, lifestyle brands, which have been launched by PSUs, have not fared well in India. Be it Hindustan Machine Tools (HMT), whose watches were a rage once, or the khadi products, which have failed to stir up excitement in the youth. The reason for that may be lack of publicity, shoddy products and the 'not hip' tag that remains associated with indigenous brands, sold by indifferent salespeople.
A few weeks earlier, Dubai-based Damas dropped its India retail project due to the organisation's internal problems. Gitanjali Gems, which had entered into a joint venture for the jewellery retail business with the brand two years earlier, has also been hesitant in launching a new chain, which it has been talking about since long.
The other players, therefore, are rushing in to fill in the vacuum. Many of them are strengthening their retail network. With its pan-India network and assured presence, analysts say that MMTC already has an edge over the lesser brands. Currently, MMTC is India's largest trading firm, and the largest importer of gold.
However, it is the smaller or region specific brands like Chandrani Pearls and Joyallukas that have fared well, because they can manage their costs better. Tanishq may be the only exception in this space. The retail sector is facing a severe problem with staffing and cost management, and most of the projects have not been executed well. Moreover, in the apparel-accessory-lifestyle segment, many brands have failed. Barring a few successful ones, many are barely surviving or have quit.
However, the market outlook is positive. According to the Gems and Jewellery Export Promotion Council, the sector witnessed an impressive growth of 46.89% in FY 2010-11 in exports, and the sector is expected to see a growth of 13% from 2011-2013. The diamond industry in India is predicted to remain stable during 2010-11 due to improved prices and steady demand, as per CRISIL.
Thus, jewellers are finally looking towards organising the fragmented sector to make the most of the opportunity. Joyallukas, the Kochi-based jewellery giant, which has been talking about an IPO (initial public offering) for long, is finally coming to the market following SEBI's nod. The IPO will come at May end. The money raised, says the company, will be used to expand its retail presence (especially in north India), with the opening of 14 stores. Other notable players, like Tribhuvandas Bhimji Zaveri, are also strengthening their presence.
"We must use all of our policy instruments-interventions in the grain market, fiscal and monetary policies-to bring down inflation further and re-anchor inflationary expectations to the 5% comfort zone," C Rangarajan, chairman of the Prime Minister's Economic Advisory Council said
Vadodara: Managing inflationary pressures-particularly in food grain prices-was the biggest challenge before the policy-makers, reports PTI quoting C Rangarajan, chairman of the Prime Minister's Economic Advisory Council.
Mr Rangarajan, a former governor of Reserve Bank of India (RBI), was speaking on the topic 'the growth path and some concerns on the way' at a function at Federation of Gujarat Industries (FGI) today.
"There are a few areas where immediate engagement of the policy-makers is needed. In the short run, managing inflationary pressures, particularly foodgrain prices, is the biggest challenge," he said.
"We also need to watch out what happens to crude prices in the global markets. We must remain committed to maintaining inflation at a low level."
Saying that he did not subscribe to the idea that high growth demanded higher level of inflation, he stated, "We must use all of our policy instruments-interventions in the grain market, fiscal and monetary policies-to bring down inflation further and re-anchor inflationary expectations to the 5% comfort zone."
The second concern, he said, was the balance of payments as the current account deficit had remained very high at 3.7% of the gross domestic product (GDP) in the first half of 2010-11. "Efforts must be made to bring down the current account deficit to a more manageable level of 2% to 2.5% of GDP."
This, he said was desirable to impart much-needed stability on the external payment front and to reduce the risk to the domestic economy from volatility in international financial markets.
Another critical challenge was fiscal consolidation which was a necessary pre-requisite for sustained growth, he added.
The CBI had gathered fresh leads after the trip of its two-member team to London in connection with cases related to alleged irregularities in hiring of AM Films and AM Car and Van Hire Limited during QBR held in 2009 at exorbitant rates
New Delhi: Suresh Kalmadi is likely to be arrested today by the Central Bureau of Investigation (CBI) which questioned him over alleged irregularities in the conduct of Queen's Baton Relay (QBR) held in London in 2009, reports PTI.
The agency is expected to arrest him later today and come out with a statement, CBI sources said.
The agency had asked Mr Kalmadi, sacked as chairman of the Commonwealth Games (CWG) organising committee, to appear before it in order to clarify some new issues which surfaced during the visit of the agency's officials to London in connection with QBR scam.
Mr Kalmadi had earlier expressed his inability to appear before the CBI citing his foreign visit, saying he would return home only after 19th April. But even after returning from his visit abroad, he did not turn up before the agency saying he was still not in Delhi.
The CBI had gathered fresh leads after the trip of its two-member team to London in connection with cases related to alleged irregularities in hiring of AM Films and AM Car and Van Hire Limited during QBR held in 2009 at exorbitant rates, sources in the agency said.
The team has spoken to the London-based owner of both the companies-Ashish Patel-who has provided information and documents with regard to the allegedly overvalued deal, the sources said.
AM Car and Van Hire company in London was engaged during QBR in 2009 to provide services like taxis for the guests and OC members. AM Films was hired to provide display monitors during the event.
The CBI team during its visit to London had also questioned other companies which were in the fray for the contract.
The agency had sent a two-member team comprising additional director VK Gupta and DIG SK Palsania to London to probe the payments made to the two companies allegedly with Mr Kalmadi's tacit approval, they said.
CBI now wants Mr Kalmadi to respond to the fresh information on the monetary transactions with the two companies.
This is the third time that Mr Kalmadi has appeared before the investigating agency for facing questions relating to the CWG scam.