THE star-studded smart advertising made us believe that ‘Diamonds are Forever”. No one is going to believe the tagline for De Beers, at least for next few months, as the Punjab national bank fraud had dented the value of diamond bands owned by Nirav Modi and Mehul Choksi, the two poster boys of the gems & jewellery industry. The media reports that these two brands were using diamonds of inferior quality triggered a panic reaction among people, who have owned the jewellery and they flocked to the experts for reassess the real worth of their jewellery. “After the news, customers are making a beeline for getting the real worth of their diamond jewellery. We got at least 20 people who have bought these brands. Also we have seen a dip in fresh demand,” said a jeweller of the South Extension market in South Delhi.
Diamond: Not a Gem of Investment
Remember the 1953, Marilyn Monroe song “Diamonds Are a Girl’s Best Friend”. While this became the global tagline for selling diamond as expression of love, it never became best friend of investors. While diamond retained its snob value among the affluent class, it remained a hard sell for investors who preferred gold over diamond and precious stones. Experts attribute the lack of investors’ appetite in diamond to three key factors; a lack of transparency in the market, a lack of liquidity oversupply and demand and finally a lack of standardisation with the value of stones.
However, in last 10 years there was a spike in diamonds sales in India by 10 per cent, driven by the middle class and sensing the market, diamond brands started advocating about the investment benefits of diamonds. However, reports of using inferior quality diamond by some of the top brands owned by Mehul Choksi and Nirav Modi have seriously dented both investment as well as the snob value. “The PNB scam has seriously dented the diamond purchase among common citizens, who have turned cautious.What is worse people have lost faith in diamond brands. I think this trend will continue for some time,” said another diamond jeweller in Noida.
How to ascertain the value of diamonds
So what is the way to ascertain the value of your investment in diamonds and precious stones? Nitin Khandelwal, chairman, Gems and Jewellery Trade Federation, says, “Diamonds are valued on 4Cs - cut, clarity, colour and carat. It becomes difficult to compare two diamonds the same way one can compare two gold products.” According to him, to secure one’s purchase, it is important to ask for the certificate that certifies the diamond being bought.
“While there are lots of labs which certify diamonds, the best ones include the likes of Gemological Institute of America, International Gemological Institute and Hindustan Gemological Laboratories. But apart from the 4Cs, one should definitely check the fifth C — credibility of the brand,” Khandelwal suggested.
VALUING THE PRECIOUS STONE
It is important to ask the seller for certificates that certify diamond.The best labs that certify diamonds are Gemological Institute of America, International Gemological Institute and Hindustan Gemological
Laboratories, among others