Rajesh Exports hits a new high again

Rajesh Exports has been in the news for the past few days, hitting a new high consistently since 26th July. There has been a buzz around the stock for some time now. The Stock Exchange had sought a clarification from the company on a news item that it was in talks to pick up stake in Swiss Gold Refinery. The company had issued a clarification then that its Board was meeting on 2nd July to mull a European company acquisition. It did not refute the “swiss” news but said that it will inform as and when the news develops.

Today, the stock hit a new 52-week high at Rs.383.70 and this is a reaction to the decision taken by the Board yesterday – it has approved a plan to make an acquisition in Europe. Though it did not name the targeted company, the deal value is placed at anywhere between $250 to $500 million.

The company is going in for this acquisition to strengthen its backward integration and enhance its presence in gold business domestically and globally.

Rajesh Exports makes both gold as well as diamond jewellery and exports its products globally. Its manufacturing facility is located at Bangalore which has an installed capacity to process 25 tonnes of jewellery per annum. It retails its products through its network of 83 jewellery showrooms, Shubh Jewellers.  The company is also looking at the option of getting into gold loan business.