Jewellers Shine on Scrapping of Gold Import Rule; Titan Soars 7%

Jewellery stocks jumped sharply on Monday after the government scrapped a rule mandating traders to export 20 per cent of all gold imported into the country.

Titan, India's biggest gold company surged over 6.5 per cent, while Rajesh Exports traded with over 6 per cent gains in morning trade.

S Subramaniam, CFO of Titan told NDTV that the easing of import rule has led to a substantial reduction in gold premiums, which have come down from $10-$15 a troy ounce to $3-$4 a troy ounce.

Falling premiums is good news for consumers and is likely to boost the demand for jewellery in the country. India is the world's second-biggest consumer of gold after China.

"When premiums fall, we pass the benefit to consumers," said Mr Subramaniam. Titan's margins are also likely to rise because of falling premiums, he said.

Along with a record duty of 10 per cent, the government introduced the so-called 80:20 import rule tying imports to exports of jewellery last year to bring down inbound shipments and narrow the current account deficit that had hit a record.

Smaller companies that faced a lot of difficulty in sourcing gold because of the rule saw huge buying interest today.

TBZ jumped 15 per cent, while Gitanjali Gems shares surged as much as 20 per cent.

The broader Nifty hit a record high today and traded 13 points higher at 8,601 as of 09.30 a.m.