THE Mayfair-based luxury jeweller Graff Diamonds has seen tremendous interest for its Hong Kong IPO of up to $1bn (£640m), sources close to the company said this weekend.
Graff’s flotation is entering its final stretch in the shadow of a global stock market rout.
Famous for its giant and rare gems, Graff will today test retail investors’ appetite for what is set to be Asia’s biggest initial public offering this year.
The float comes close on the heels of the botched $16bn Facebook offering, which has undermined investor confidence.
“We are building the book every day, we have tremendous interest in the company across the board, we are very happy,” chief executive Francois Graff said via a video conference from London, without elaborating how much demand the offer has generated.
Since Graff Diamonds’ management began meeting institutional investors and fund managers on 7 May, global stock markets have gone into a tailspin.
One of Graff’s nearest rivals, Tiffany, cut its sales forecast last week, blaming it on slowing demand from key markets such as China.
However, Graff executives were upbeat. “I think it’s important to understand that our target audience is extremely resilient and very much insulated to the general gyrations of world economies,” Graff told a media conference to launch the Hong Kong offer.
“It makes, in our opinion, little difference if the Chinese GDP [growth] is seven or 7.5 per cent to the performance of our business and our particular segment.”
Some analysts and fund mangers have questioned the company’s valuation in the face of a slowdown in luxury spending in China. That has made some investors cautious.
It has emerged during the roadshow that the bulk of Graff’s revenues come from around 20 top clients, many of whom are based in the far east.
Pricing is expected Thursday.