Lab-GrownOct 19, 2022
In India’s Lab-Grown Diamond Industry, Change Is the Only ConstantLab-GrownOct 19, 2022
Q&A: Jayen Shah, Founder of Mavuca Capital Advisors
National Jeweler chats with the career banker about the prospects for the lab-grown diamond industry and financing options.
Jayen Shah, CFA and founder of Mavuca, started his professional career in 1995 with Kotak Mahindra Group. He has held various leadership positions at ABN AMRO, Rabobank, The Royal Bank of Scotland PLC (Singapore branch) and Standard Chartered Bank. He joined IDFC bank in 2011. Under his stewardship, IDFC was named Best Bond House–India, 2015 by IFR-Asia.
Mumbai—A tech-enabled investment banking firm, Mavuca specializes in both debt and equity funding.
Over its short history, Mavuca has successfully executed 19 fundraising transactions, grossing more than INR 70 billion (more than $850,000) for marquee clients including L&T Group, KKR’s Virescent Renewable InvIT, JSW Steel, Welspun Enterprises and Shapoorji Group, among others.
National Jeweler recently caught up with the firm’s founder, Jayen Shah, via email to seek his views on the lab-grown diamond industry.
Here’s what he had to say.
National Jeweler: Why is the lab-grown diamond industry considered a sunrise industry?
Jayen Shah: Millennials and Gen Zers constitute probably the biggest growing demographically similar consumer segment.
Their consciousness toward environment, ethics and cost has triggered quickest acceptance and adoption of lab-grown diamonds.
On the other hand, lab-grown diamond technology has been around for more than 60 years. However, it is only recently that advancements in technology have made high quality, affordable lab-grown diamonds a reality.
On the other hand, lab-grown diamond technology has been around for more than 60 years. However, it is only recently that advancements in technology have made high quality, affordable lab-grown diamonds a reality.
On the cost front, experts opine that lab-grown diamonds are [significantly less expensive than] mined diamonds. Early adoption of lab-grown diamonds has been witnessed in the United States and Western Europe.
NJ: What is the market size of lab-grown diamonds globally and in India?
JS: Various estimates suggest that in 2021,lab-grown diamond sales have surpassed $6 billion and out of this, India’s contribution was $1.3 billion.
The market size of lab-grown diamond jewelry in 2019 was a meager 2 percent of [total] diamond jewelry [sales], which is expected to be up 8 percent [year-over-year] in 2022.
Some credible analysts project lab-grown diamonds to be a significant 25 percent of the diamond [market] in five years. Growth percentages are stupendous.
Besides jewelry, 5G networks, computer chips, and satellites use these materials. Thus lab-grown diamonds’ growth is likely to experience significant demand surge due to its multiple uses.
NJ: What are the advantages to Indian manufacturers?
JS: Realizing the immense potential of lab-grown diamonds, the Indian government, after the successful rollout of PLI (production linked incentives) schemes for 14 sectors, is now in discussions for introduction of similar incentives for lab-grown diamond manufacturing along with two more sectors, bicycles and toys.
The extant PLI schemes have a proposed outlay of INR equivalent of $24 billion and aim to create 6 million jobs in the next five years. The launch of the PLI scheme is further likely to boost lab-grown diamond manufacturing in India.
Further, the RBI notification from July 2022 on International Trade Settlement in Indian rupees is [designed] to boost international trade for India. The lab-grown diamond sector may reap the benefits of relatively stable exchange rates for its capital goods imports.
For exporters, export-import trade being settled in INR will even out the uncertainties of forex fluctuations and enhance the operational convenience.
NJ: What financial constraints do Indian manufacturers face in terms of capacity expansion?
JS: The Achilles’ heels for any sunrise industry are some of the usual “teething” problems, such as:
- Time taken for technology stabilization, product adoption and quality framework;
- Volatility in product pricing;
- Limited or non-availability of “seconds” market;
- Fragmentation of market players;
- Higher financial risk-reward; and
- Perception of enhanced credit risk.
Some of the Indian banking and financial institutional lenders have taken initial steps to analyze and model these risks. These lenders, with suitable mitigating factors and “margin-of-safety” have lent funds toward setting up lab-grown diamond manufacturing facilities.
NJ: What are the highlights of these financing initiatives?
JS: Taking a step back, components of lab-grown diamond manufacturing facilities include: land, building, machinery, technology, back-up power facilities, supporting infrastructure, etc.
Plus, a steady energy supply is an absolute must for any lab-grown diamond manufacturing facility.
Another differentiating factor is the type of technology used to grow diamonds in the laboratory. It could either be the high-pressure, high-temperature (HPHT) process or chemical vapor deposition (CVD).
The cost of machinery to set up a manufacturing unit is significantly higher for HPHT as compared with CVD. Users of both technologies strongly advocate respective project viability, pay-back period, and ROIs.
Several early movers have been the public sector banks, like the State Bank of India (SBI). SBI has already shown interest in financing such brownfield/greenfield projects.
Some of the financing highlights are as follows.
- Financing format: term loan
- Tenure: up to seven years
- Amount of loan: up to 70 percent of the project cost. However, many lenders require cost of land purchase to be funded from promoters’ equity.
- Loan repayment with principal repayment moratorium for 12-18 months and, thereafter, principal repayments customized to projected cash flow generation.
- Financial covenants linked to operating parameters, such as debt/EBIDTA and/or debt service coverage ratio (DSCR)
- Security: first charge of land, plant and machinery
- Ratings: lenders prefer to have investment grade rating from SEBI-registered rating agencies.
Lenders will require a quality technical-economic viability (TEV) study with detailed project report (DPR).
Lenders will weigh on other qualitative factors, including management strength, technical expertise, technology type, equipment manufacturers, etc. Every financing case may have its specific transactional customization.
NJ: What about working capital financing?
JS: Some of the major operating costs of a lab-grown diamond manufacturing facility are electricity, scientists, skilled technicians, machinery maintenance, seeds and general administrative costs.
These accumulate to a relatively smaller proportion, though another major component that adds to the working capital is the credit period provided to buyers.
Several financing options exist, such as receivables discounting, factoring, and bank working capital financing for financial management of the receivables.
Also, the lab-grown diamond industry is a power guzzler. Therefore, the cost of [electricity] is very high. For long-term project viability and sustainability, lab-grown diamond manufacturers may consider long-term power purchase agreements with renewable independent power producers.
This story is one of three included in the special India Diamond Report newsletter. The stories are produced by an independent editor based in India.
This story is one of three included in the special India Diamond Report newsletter. The stories are produced by an independent editor based in India.
More on Lab-Grown
The Latest
Events & AwardsJun 06, 2025
Here Are the 2025 Retailer Hall of Fame InducteesThis year’s honorees include a Midwest retailer and two multi-store independents, one in New York and the other in New England.
CollectionsJun 06, 2025
Piece of the Week: Harwell Godfrey’s ‘Granny Squares Eleanor’ Necklace As an homage to iconic crochet blankets, the necklace features the nostalgic motif through a kaleidoscope of cabochon-cut stones.
Events & AwardsJun 05, 2025
The 12 Fresh Faces in Couture’s Design AtelierDiscover the dozen up-and-coming brands exhibiting in the Design Atelier for the first time.
Brought to you by
The True Power Behind the Counter: Why Sales Associates Are the Heart of the Jewelry BusinessWhen investing in your jewelry business, it's important not to overlook the most crucial element of success: the sales associates.
SourcingJun 05, 2025
A Rare Suite of Rubies Has Arrived in Las VegasThe “Royal Ruby” Collection is a quintet of untreated rubies curated by collector Jack Abraham.
Weekly QuizJun 05, 2025
This Week’s QuizTest your jewelry news knowledge by answering these questions.
Events & AwardsJun 05, 2025
Daymond John to Give Keynote at JCK Las VegasThe entrepreneur and “Shark Tank” star will share his top tips for success.
MajorsJun 05, 2025
Platinum Guild International Updates Leadership TeamTwo existing executives have been given new roles.
Brought to you by
Clienteling Isn’t a Buzzword. It’s an Essential Business Model.More shoppers are walking out without buying. Here’s how smart jewelers can bring them back—and the tool they need to do it right.
Events & AwardsJun 05, 2025
Zillion Announces 'Women in STEM' Scholarship RecipientMeredith Tiderington, an electrical engineering student, was selected for the award.
Events & AwardsJun 04, 2025
As JCK Talks Returns, Don’t Miss These 12 SessionsFrom design trends to sustainability, here’s a roundup of can’t-miss education sessions at JCK Las Vegas.
CrimeJun 04, 2025
10 Safety Tips for the Las Vegas Shows The Jewelers’ Security Alliance offers advice for those attending the annual trade shows.
MajorsJun 04, 2025
Amy Curran Promoted at Hill & Co.Her new role is director of strategic initiatives.
CollectionsJun 03, 2025
In Her Latest Collection, Viviana Langhoff Is Leaning Into GoldThe designer is embracing bold pieces with weight to them in “AU79,” a collection she celebrated with a creative launch party.
FinancialsJun 03, 2025
Signet Jewelers Sees Turnaround in Q1 With Sales Ticking Up 2%On an earnings call, CEO J.K. Symancyk discussed what’s working for the company and how it’s preparing for the potential impact of tariffs.
SurveysJun 03, 2025
Consumer Confidence Improves in May The index partially rebounded after months of decline, due in part to the U.S.-China deal to temporarily reduce import tariffs.
CollectionsJun 03, 2025
Dakota Johnson Is Roberto Coin’s New Brand AmbassadorThe actress stars in the latest campaign set in Venice, Italy, and is set to participate in other creative initiatives for the jeweler.
GradingJun 03, 2025
Mason-Kay Jade Adds ‘Fei Cui’ to Jade ReportsThe company has joined other labs, including GIA and Lotus Gemology, in adopting the Chinese term for "jadeite jade."
SourcingJun 02, 2025
Gemfields’ June Auction to Include 36-Carat RubyThe large stone will be offered at its June sale along with a selection of secondary-type rubies from a new area of the Montepuez mine.
GradingJun 02, 2025
GSI Opens New Lab in Thailand Located in Bangkok, the laboratory is Gemological Science International’s 14th location worldwide.
TrendsJun 02, 2025
Amanda’s Style File: Three Gems for June Those born in June have a myriad of options for their birthstone jewelry.
SourcingJun 02, 2025
David Allouche Joins Grandview Klein DiamondsThe diamond industry veteran has been named its senior sales executive.
FinancialsMay 30, 2025
Movado’s Q1 Sales Slip Amid ‘Challenging’ Retail Environment The company plans to raise the prices of select watches to offset the impact of tariffs.
Policies & IssuesMay 30, 2025
Tariffs & Designers: Navigating Pricing in an Unstable EnvironmentBetween tariffs and the sky-high cost of gold, designers enter this year’s Las Vegas shows with a lot of questions and few answers.
CollectionsMay 30, 2025
Piece of the Week: Renato Cipullo’s ‘Hematite Blaze’ NecklaceDesigned by founder Renato and his daughter Serena Cipullo, it showcases a flame motif representing unity and the power of gathering.
Policies & IssuesMay 30, 2025
Trade Court Declares Trump’s Tariffs InvalidHowever, the tariffs remain in effect in the short term, as an appeals court has stayed the U.S. Court of International Trade’s decision.
CollectionsMay 29, 2025
Britney Spears Files Trademark for New Jewelry LineThe pop icon is one step closer to launching her “B Tiny” jewelry collection, a collection she first began posting about last fall.
Supplier BulletinMay 29, 2025
Inoveo Platinum Grain, Exclusively Distributed by StullerSponsored by Stuller
