Domestic jewellery maker Rajesh Exports Ltd (REL) said on Monday that it acquired 100% stake in Swiss-based Valcambi, the world's largest gold refining company, in a deal worth $400 million (Rs 2,540 crore).
The deal will give Rajesh Exports access to precious metals in raw form at "competitive prices."
"It will help Rajesh Exports in securing raw material like dore," said analyst Bhargava N Vaidya of BN Vaidya Associates.
Rajesh Exports plans to increase its production at its domestic refinery after the acquisition is completed, Rajesh Mehta, the company's chairman told Reuters.
"Valcambi has world class refining technology. So it will help the Indian company in setting up or expanding refining capacity if it wants," he added.
Currently, India is the world's largest consumer of gold seeing a demand of about 900 tonnes annually.
Valcambi has refined and sold 945 tonnes of gold on an average in the past three years. It also sold 325 tonnes of silver annually during the same period.
"On a theoretical basis, Valcambi is capable of supplying the entire gold requirement of India. This acquisition will add significantly to the revenues and profitability of REL group during the coming years," Rajesh told DNA.
Rajesh Exports said that the top management at Valcambi including chief executive Michael Mesaric will join the company to assist the ownership transfer and "future expansion."
Valcambi's Mesaric said that would make use of Rajesh's technical expertise to manufacture "innovative gold products" in the European markets.
"More than the price of sale, my aim was to deliver the company to a buyer who would maintain its world class standard and stature. I am confident that under the leadership of Rajesh Exports, Valcambi will keep up its excellence, and would continue to grow and increase its share in the global gold business," said Emilio Camponovo, the founder of Valcambi.
Following the reports of acquisition of Valcambi, stock prices of Rajesh Exports went up by over 2.5% to trade at Rs 542.70 on the Bombay Stock Exchange (BSE).