Surat: Diamond connoisseurs can expect additional fall within the prices of polished gems within the subsequent 3 to 4 months. Reason: Companies making polished diamonds in Surat and Mumbai have started liquidating their inventories through providing discounts starting from 30-40% for settling the loan accounts with the banks.
Diamond firms have been given the ultimatum to settle their outstanding loan accounts earlier than March 31. Following the financial institution frauds reported within the last two years involving main diamond company house owners, the banks have reduced their credit publicity to their current shoppers within the trade through virtually 50 %. The collateral has been additionally larger up to 100% to steer clear of defaults.
Given the liquidity crisis, the diamond firms have started selling their inventory hurriedly so that they are able to get sufficient money to pay off their loans through March 31 closing date. The inventory is being offered at discounted charges to the sellers and merchants in Surat and Mumbai.
Diamond corporations have annual credit strains with the nationalized and personal banks for getting tough diamonds from the mining firms like De Beers. Since the tough diamond prices have remained unchanged and in some cases larger through virtually 15%, those firms have to pay off in complete amount. On the opposite hand, the polished diamond prices have reduced through 20-25% within the last two years, eroding the benefit margins of the companies.
In the last two years, the polished diamond prices have long gone down in all the categories with the perfect fall of 30% registered within the low-quality or small diamonds manufactured in Surat. On the opposite, the tough diamond prices have remained unchanged, growing heavy power on the diamond makers to earn desired benefit.
Navya Patel, a 30-year-old financial institution professional who just lately went to shop for a diamond engagement ring, mentioned, “The gold ring was once studded with a unmarried stone weighing 50 cents and priced at Rs 1.50 lakh. I used to be advised to watch for 3 to 4 months to get the same ring under Rs 1 lakh because the marketplace is flooded with polished diamonds at discounted prices.”
Aniruddha Lidbide, diamond trade analyst mentioned, “The diamond firms have no choice but to liquidate their polished inventories to pay off their financial institution loans latest through March 31. Even if the true price of the diamond stock is Rs 100 crore, company proprietor will have to liquidate it on the marketplace price which would possibly fetch him not up to Rs 60 crore. Simply put, the diamantaires are looking at massive losses to pay off the banks.”
Diamond firms have been given the ultimatum to settle their outstanding loan accounts earlier than March 31. Following the financial institution frauds reported within the last two years involving main diamond company house owners, the banks have reduced their credit publicity to their current shoppers within the trade through virtually 50 %. The collateral has been additionally larger up to 100% to steer clear of defaults.
Given the liquidity crisis, the diamond firms have started selling their inventory hurriedly so that they are able to get sufficient money to pay off their loans through March 31 closing date. The inventory is being offered at discounted charges to the sellers and merchants in Surat and Mumbai.
Diamond corporations have annual credit strains with the nationalized and personal banks for getting tough diamonds from the mining firms like De Beers. Since the tough diamond prices have remained unchanged and in some cases larger through virtually 15%, those firms have to pay off in complete amount. On the opposite hand, the polished diamond prices have reduced through 20-25% within the last two years, eroding the benefit margins of the companies.
In the last two years, the polished diamond prices have long gone down in all the categories with the perfect fall of 30% registered within the low-quality or small diamonds manufactured in Surat. On the opposite, the tough diamond prices have remained unchanged, growing heavy power on the diamond makers to earn desired benefit.
Navya Patel, a 30-year-old financial institution professional who just lately went to shop for a diamond engagement ring, mentioned, “The gold ring was once studded with a unmarried stone weighing 50 cents and priced at Rs 1.50 lakh. I used to be advised to watch for 3 to 4 months to get the same ring under Rs 1 lakh because the marketplace is flooded with polished diamonds at discounted prices.”
Aniruddha Lidbide, diamond trade analyst mentioned, “The diamond firms have no choice but to liquidate their polished inventories to pay off their financial institution loans latest through March 31. Even if the true price of the diamond stock is Rs 100 crore, company proprietor will have to liquidate it on the marketplace price which would possibly fetch him not up to Rs 60 crore. Simply put, the diamantaires are looking at massive losses to pay off the banks.”
Diamond prices may fall further
![Diamond prices may fall further]()
Reviewed by Kailash
on
March 27, 2019
Rating:
