The dazzling rock holds its sway the world over. Both women and men swear by it, and its popularity refuses to fade thousands of years after it was first discovered by man. Known for their perennial fixation for gold, Indians are now looking at the white bauble with greater interest.
More and more women consider gold as old-fashioned, and something that their mothers and grandmothers used to wear. No wonder then that these days, Indian weddings are not only an occasion for the bride to flaunt her designer trousseau, but also chic diamond jewellery.
So, it’s time for prospective grooms, brides and their families to shop for ornaments, hoping to benefit from discount schemes and other offers that several jewellery houses roll out in the run up to Diwali.
What’s more, this may be the right time to buy these most precious of stones, from the investment perspective too, given that the demand for diamonds has picked up significantly post the 2008 global slowdown, which saw a fall in diamond prices by almost 30%.
Industry experts say that though diamond prices have risen by 10-15% over the past one year, it still remains a favourite buy for most Indian brides and grooms. For instance, a Gili finger ring of VVS clarity and a weight of 0.04 carat set in 18-carat gold, weighing 1.94 gram, costs Rs 11,100. Similarly, a 0.15-carat earring of VVS clarity will cost Rs 22,000.
Unlike gold, there is no single price for diamond because of various determinants including cut, weight and clarity. “A major increase in gold prices and a shift in preference towards diamond-studded jewellery, as an accessory and style statement, is partly responsible for the increase in demand,” says Mehul Choksi, CMD, Gitanjali Group.
Even jewellery houses have been witnessing an increase in demand for diamond jewellery. “The demand for diamond has shown consistent growth over the past three years, and this year too, it has been in line with our expectations, which are based on our experience and overall economic conditions,” RK Nagarkar, general manager, TBZ — The Original.
However, while gold buying is relatively simpler, buying diamonds can be quite tricky, largely due to the absence of hallmarking practice. This is why you need to exercise more caution while zeroing in on your diamond-studded ornaments.
The best test is try breaking it with a hammer, if its does, you can assume it’s not a real one, say most jewellers in a lighter vein.
You may not have the heart to try out this exercise given the emotional value attached to your betrothal/wedding ring, but there is a more standardised approach to ascertain the diamond’s quality, which is commonly referred to as the 4Cs analysis — cut, colour, clarity and carat weight.
Cuts are of three kinds: proportional, shallow and deep. Proportional is the most expensive form of cut.
Diamonds are usually cut according to a mathematical formula. A round brilliant cut, for example, should have 58 “facets”. These facets should be in a certain proportion so that it has the right glitter and catches the customer’s eye.
Similarly, diamonds come in various shapes like round brilliant, marquise, princess, pear, heart and oval. Round brilliant is of the most superior variety.
In terms of colour, the diamonds can be classified into colourless, near-colourless, faint yellow, very light yellow, light yellow and yellow.
Lesser the colour, the better is the quality.
The grades range from D to V, where the completely colourless variety is assigned the grade D. As far as clarity is concerned, the clearest diamond is the rarest one and, hence, commands the highest price. Internally Flawless (IF) is the grade assigned to the clearest stone.
Other less superior varieties include very very slightly included (VVS1 and VVS2), very slightly included (VS1 and VS2), slightly included (SI1 and SI2) and imperfect (I1, I2 and I3).
Then comes the last parameter — carat weight, which determines the size of the diamond and accordingly, the price. The weight of a diamond is expressed in terms of carats. One carat is equal to 1/5th of a gram.
You may want to exchange your old jewellery for new ornaments to keep up with contemporary designs or simply liquidate them for cash. Hence, you should enquire about the buy-back value of the diamonds you purchase. Unlike gold, there is no standard practice when it comes to buy back of diamonds.
Most big brands offer around 80-85% of the trading value of your diamonds, if you sell it for cash. “We guarantee buyback at a 20% discount, i.e. customer gets back 80 percent of the price,” Mr Choksi informs.
“We don’t offer cash across the counter, we offer a cheque to the customer,” clarifies the store manager at Tanishq in Chembur, Mumbai. This figure could drop to around 75% in case of small-time jewellers.
Most well-known diamond jewellery houses refuse to buy diamonds not sold by them. “One of the biggest concerns here is the quality of diamonds. We trust the quality only of our inhouse diamonds. A shallow cut can make the diamond look bigger, but that doesn’t enhance its quality,” explains a Tanishq store manager.
Chitra Rajagopalan discovered this the hard way. She was looking to exchange her grandmother’s diamond earrings at Tribhovandas Bhimji Zaveri (TBZ). She had almost selected the design, but the store refused to exchange her old diamonds. She found it difficult to dispose the old diamond earrings.
A small jeweller at Zaveri Bazaar finally bought her earrings for Rs 30,000, out of which the jeweller took a commission of Rs 10,000 on the purchase, which is commonly called margin money in the diamond market.
“More than the quality of diamonds, it’s the margin money these jewellers charge, which amounts to almost 15-20%, that pinches your pocket,” Ms Rajagopalan adds. So, if you have bought a pair of diamond earrings from your neighbourhood jeweller, it’s better to have an exchange transaction with him only.
Similarly, if you buy branded jewellery such as Gili or Nakshatra you get the best buy-back deal only from them.
Diamond prices are expected to increase in the years to come, on the back of strong demand and constricted supply. “The output from the existing diamond mines is declining and no new mines have been discovered recently. So, the supply of diamonds is likely to be restricted over the next decade and beyond,” says Mr Choksi.
So you can buy diamonds if you are unable to resist their allure, but be clear about their intended use. If it’s for their ornamental value, you need not hesitate to go ahead. However, if you have investment on your mind, you need to think twice, given the ambiguity and lack of standardisation pertaining to diamond buy-back transactions.