Sky Gold & Diamonds Ltd has announced a significant strategic update to its expansion roadmap, moving away from its planned greenfield facility purchase. The company will now pursue an asset-light model, scaling capacity through leased manufacturing facilities to enhance agility and capital efficiency. This move involves monetizing previously acquired land for approximately INR 105 crore. The company reaffirms its commitment to becoming net debt free by FY30, utilizing optimized funding mechanisms like Gold Metal Loans.
Strategic Pivot in Expansion Roadmap
Sky Gold & Diamonds Ltd today declared a strategic revision to its capacity expansion plans under the ongoing Sky Gold 3.0 vision. The company, one of India’s leading B2B jewellery manufacturers, is pivoting toward a more agile, asset-light expansion model to reinforce capital efficiency and long-term financial resilience.
Monetization of Greenfield Project
Previously, the company had earmarked approximately INR 105 crore for acquiring land to establish a large-scale greenfield manufacturing facility intended to quadruple capacity. Following an internal review, the management has decided to monetise this land. The proposed land sale is targeted for completion within the next six months. As a safeguard, the promoter family has committed to acquiring the land if the external transaction is not concluded in time, ensuring the company is compensated for any opportunity cost.
Adoption of Leasing Strategy
Going forward, Sky Gold will achieve capacity scale through leased manufacturing facilities. Management expects this approach to facilitate faster execution and deliver improved capital efficiency without delaying expansion timelines, as the leasing strategy execution is already underway.
Financial Discipline and Funding Optimization
The proceeds from the land monetization, combined with anticipated improved operating cash flows in FY27, are expected to drive a reduction in borrowings by over 20%. Furthermore, the company plans to optimize funding costs through increased utilization of Gold Metal Loans (GML) and other structured financing products.
Mangesh Chauhan, Managing Director, stated that this decision allows the organization to be structurally stronger and more agile. The capital released will be redeployed to strengthen operations and support the next phase of growth, emphasizing greater discipline and sharper execution.
Commitment to Debt Reduction
Reaffirming its financial commitment, Sky Gold continues to target becoming net debt free by FY30, strengthening the foundation for sustained, profitable growth in line with guidance provided during recent investor interactions.
Source: BSE
