Life insurance companies and mutual funds have participated in the qualified institutional placement (QIP) of ₹459 crore by jewellery major Senco Gold.

In a stock exchange filing late on Friday, Senco Gold has said that the QIP committee of the board of the directors of the company has approved the issuance and allotment of 40.8 lakh shares of face value ₹10 at an issue price of ₹1,125 per share (including a premium of ₹1,115 per share).

Tata AIA Life Insurance, ICICI Prudential Life Insurance, Tata Multicap Fund, Sundaram Mutual Fund, BOFA Securities Europe, Bank of India Flexicap Fund, Bandhan Small Cap Fund, Carnelian Bharat Amritkaal Fund are among the allottees that have picked up more than 5 per cent of the securities offered in the issue.

“Pursuant to the allotment of the equity shares in the issue, the paid-up equity share capital of the company stands increased from ₹77,72,24,480 comprising 7,77,22,448 equity shares to ₹81,80,24,480 comprising 8,18,02,448 equity shares,” the company said in a statement to the stock exchanges.

Explaining the rationale behind raising the capital, the company had informed analysts that the funds would be used to meet working capital requirements and maintain business at the same level.

“The IPO has happened, it’s been one year, and we were initially planning for a much higher amount during the IPO, but later on due to the market condition, we had to agree on a much lower amount and plan accordingly.

“So, now that the market has stabilised, and I think that the opportunity of growth continues to remain. So, we have decided that let us raise a round of QIP for the future growth of the company,” Sen had informed analysts at the Q2FY25 earnings call.

Demand trends

World Gold Council remains optimistic of gold demand in 2025 in India, but tariff wars on the horizon could affect demand in China.

China and India are gold’s largest markets and Asia makes up more than 60 per cent of annual global gold demand (excluding central banks).

“India seems to stand on a better footing. Economic growth remains above 6.5 per cent, and any tariff increase will affect it less than other US trading partners given a much smaller trade deficit.

“This, in turn, could support gold consumer demand. At the same time, gold financial investment products have seen remarkable growth and while they make up a small portion of the overall market, they have been awelcome addition to gold’s ecosystem,” the World Gold Council said in a report in its latest outlook report.

“However, the risk of trade wars looms large. Chinese consumer demand will likely depend on the health of economic growth — whether through normal means or government stimuli.

“And while the same factors that influenced investment demand in 2024 are still present, gold may face competition from stocks and real estate,” the report added.

The council estimates that gold price have increased by more than 28 per cent through November in US dollars, trading 22 per cent higher on an average this year than during 2023.