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Lab-grown diamonds drive growth for IGI India, accounting for 60% of revenue: Report
The IGI has projected a compounded annual growth rate (CAGR) of 15-20 percent over the next five years in the lab-grown diamond industry
The US has been the largest market for lab-grown diamonds, but India is emerging as a significant player. (Image: Unsplash)
The lab-grown diamond industry is witnessing a positive response from the consumers' perspective, leading to a rise in the certification volumes. According to a report by CNBC TV-18, the International Gemmological Institute (IGI) witnessed a 27 percent jump in certification volumes for lab-grown diamonds over the past years.
The IGI has projected a compounded annual growth rate (CAGR) of 15-20 percent over the next five years in the lab-grown diamond industry.
Furthermore, in IGI's revenue composition, certification of lab-grown diamonds contribute nearly 60 percent of its business while natural diamonds' contributed to 20 percent only.
While the concerns over lower margin looms, IGI is confident that the volume growth will offset any potential margin pressure.
Eashwar Iyer, the Chief Financial Officer at IGI told CNBC TV18 that the current margins of lab-grown diamonds are between 56 and 57 percent and exuded confidence that there's no downside risk because increasing volumes will compensate for the margin differential.
The US has been the largest market for lab-grown diamonds, but India is emerging as a significant player.
"Earlier, only 1.5 percent of the world's population purchased diamonds. However, with the greater accessibility of the lab-grown diamonds, the percentage of buyers is expected to rise to 5-10 percent," Tehmasp Printer, Managing Director and CEO of IGI India.
The certification of diamonds has also expanded from smaller stones to larger stones, typically in the 1.5-2 carat range, with some reaching as high as 10-20 carats.
Priyanka Gill moves on from Kalaari Capital; starts lab-grown diamonds brand Coluxe as Founder and CEO Besides, the lab-grown diamond certification, IGI is expanding its certification services beyond loose stones to include finished jewellery.
Iyer anticipated that the global certification market, currently valued at $600 million, will reach $1.1–$1.2 billion over the next five years.
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