Jewellery sales could rise 20% in Diwali

JEWELLERY sales could go up by a significant 20 per cent this Diwali.

Thanks to extension of provisions of Prevention of Money Laundering Act or PMLA from the present limit of Rs 50,000 to Rs 2,00,000 in the case of jewellery purchases, there is suddenly a spring in every jeweller’s step.

Going by the rise in sales in the weekend post the announcement, it is understandable. “More than 50 per cent of sales in gold jewellery happen in the Rs 50,000 and Rs 2,00,000 range. The move is great news for the middle class whose average buy is in that range. The spend from this tier of the customer base will definitely go up,” predicted Nitin Khandelwal, chairman, All India Gems & Jewellery Trade Federation (GJF). Jewellery stocks posted gains on Monday after the government relaxed the know your customer (KYC) norms for purchase of jewellery and kept the sector away from the ambit of money laundering laws ahead of the festive season. The industry has received some relief after a string of government decisions that hit sales, including import duty hike, excise duty, demonetisation and GST.

Titan saw the shares moving up 5 per cent to Rs 628 per piece on Monday. Tribhovandas Bhimji Zaveri gained 7.78 per cent to Rs 130.80 a share and was trading at Rs 127.75 a share, up 5.27 per cent, when the market closed.

PC Jewellers saw its shares gaining 6.7 per cent to Rs 398.70 a share, Gitanjali went up 7 per cent and closed 3.8 per cent up at Rs

72.40 per piece and Thangamayil Jewellery went up 4.76 per cent to Rs 418.95.

Rajesh Exports went up 2 per cent to Rs 829 a share and settled at Rs 814 at the end of the session.

During the weekend, the government had relaxed KYC norms and had announced that a customer need not submit PAN, Aadhaar card or any other identity details for jewellery purchases above Rs 50,000.

Further, an entity dealing in gems or jewellery or any other high-value goods with a turnover of Rs 2 crore or more will not be covered under PMLA, 2002.

The organised jewelers have been hit by the norms since January 2016, when the government had mandated the submission of PAN details for purchases above Rs 2 lakh.

The limit was brought down from Rs 5 lakh. Unorganised

jewellers doing unbilled transactions had taken away a good portion of sales from the organised players.

“Over the past 20 days we had met each and every department and key personnel in the government. The support that we got from various associations and chain store owners on this concern was phenomenal. This is really a proud moment for our industry and we look forward to good

business during the festive season,” said Khandelwal.

Said Saurabh Gadgil, chairman and managing director, PNG Jewellers, and director, Indian Bullion Jewellers Association: “This year’s Diwali outlook seems bullish. Surge in gold pricing has come down and stabilised. Hence, we feel this year demand for gold and gold jewellery will be up by 10 to 15 per cent compared to last year. The market sentiment seems

positive for both investors and buyers.”

Jewelers are finally looking at recovering from a lackluster Navarati this September, where sales had dipped.

According to industry estimates, imports fell by 43 per cent in September compared to last year after the government made furnishing of PAN mandatory.

Gold sales are gaining momentum across the country and wedding shopping

too has taken off in full swing this weekend soon after the relaxation in KYC norms were announced.

“It is a positive move for this sector and will improve sales. Many buyers fear sharing personal details with shopkeepers. This step is expected to encourage buyers to buy from registered shops. The sale and demand of branded jeweller is likely to rise,” said an analyst from Religare Securities.

The All India Gems and Jewellery Trade Federation, the trade body for the promotion and growth of trade in gems and jewellery across India, made a series of representations with the financial intelligence unit, directorate-general of goods and service tax intelligence and NITI-Aayog highlighting the various concerns of the industry. (With inputs from TickerNews Service)