Few months back, Gitanjali Gems Ltd announced a major restructuring of its business to create better synergy within group companies, bring down costs and improve cash flows for "unlocking value in future".
The company at present is consolidating its various subsidiaries which are into jewelry retail under different brands like Gili and Asmi besides exports.
Gitanjali Gems Ltd's board had already approved the merger of its arm Gitanjali Exports Corporation Limited (GECL) with itself. As part of the consolidation exercise, the board approved the schemes of amalgamation of various group companies.
Accordingly, Asmi Jewellery India Ltd and Spectrum Jewellery Ltd will be merged with Nakshatra Brands Ltd. All the three entities are step down subsidiaries of the company. Gitanjali Jewellery Retail Ltd and Gitanjali Lifestyle will be merged with GILI India Ltd. Gitanjali Jewellery Retail and Gitanjali Lifestyle are the wholly-owned subsidiaries of the company, whereas Gili India is the step down subsidiary of the company.
The amalgamation is subject to the approval of High Courts and all other statutory approvals as may be required under the Companies Act, 1956.
Though presently there are demand woes - higher prices, a weak monsoon and oversupply of bullion following robust imports earlier in 2015; demand could improve soon as the festival season kicks off. The nine-day Hindu festival of Navratri started on Tuesday, to be followed by Dussehra, Dhanteras and Diwali in the next few weeks - all considered auspicious periods to buy gold.
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