Muthoot Exim, the precious metals division of the Muthoot group, has tied up with Divine Solitaires to launch a range of single-stone diamond rings aimed at India’s lowest economic bracket that will be sold through all of Muthoot’s 3,600 outlets — most of them in small-town and rural India.
In a first for India, the new initiative, Swarnavarsham Diamond Jewellery, offers a diamond buy-back at 90 percent of prevailing prices.
Muthoot is a leader in the gold loans business and instalment-based gold purchase schemes in India and has sold a tonne of gold to its approximately 300,000 customers in three years. “The target customer base are those that Muthoot already services, typically vegetable vendors and daily wage workers, who have acquired gold through small instalment payments,” said Keyur Shah, CEO of the Muthoot Precious Metals Division.
He added, “While we have enabled them to acquire gold, which is a part of the social fabric of Indian society, we have now also given them the opportunity to acquire diamonds, which they have typically seen as being beyond their means.”
The diamonds will be from Divine Solitaires’ Pratham collection, with the initial launch series featuring 0.14-carat diamonds of E-F colour and VVS quality, set in a range of 18-karat gold rings with gold in 12, 14 and 16 millimetre sizes, with gold weights of 2, 2.2 and 2.4 grams respectively. The rings will be sold in a sealed, tamper-proof pack.
“Gold has been readily available and with transparent pricing,” said Jignesh Mehta, the founder and Managing Director of Divine Solitaires, “but the opaqueness of the diamond valuation system has kept Indian consumers from acquiring them. By offering a buy-back for the diamond, and basing its price on a published price index, we deliver a price assurance that will help break this barrier.”
Hitesh Mehta, of H. Dipak, who is also a director of Divine Solitaires, observed, “This is a game changer. We will now have diamonds penetrating the remotest parts of India with guaranteed prices and qualities. Something like this hasn’t been done anywhere else in the world.”
In response to a question, he said that the current offering was only for round brilliants, though princess cuts, pears and ovals are being readied for a future rollout.
To another question, Shah replied that Muthoot would not be issuing loans against custody of the new diamond product (which it does with plain gold jewellery) as this was not yet permitted by the Reserve Bank of India (RBI). “There are several issues, mainly that of valuation — a bank manager would not be sure that stone’s declared value is what it is — that need to be addressed before the RBI issues permissions for anyone to accept a diamond as collateral for a loan,” he said.