Surat Diamond Bourse chairman to resume operations in Mumbai

There has been stiff competition between SDB and BDB – the latter offers amenities for international buyers but faces space constraints. The office spaces are also expensive compared to SDB. Diamonds are transported by trains from Surat to Mumbai, which takes about four hours

Barely a month after the grand inauguration of the Surat Diamond Bourse (SDB), promoters of Kiran Gems and Diamonds, one of the largest diamond companies in India, have chosen to return to Bharat Diamond Bourse (BDB) in Mumbai for now. Officials at SDB have said this is a temporary arrangement and the decision is grounded in the anticipation of a fully operational Surat bourse later this year.

Surat Diamond Bourse was inaugurated by Prime Minister Narendra Modi on December 17, 2023. (HT Archives)

Kiran Gems and Diamonds is chaired by Vallabh Lakhani, who also serves as the chairman of SDB. He is the founding figure behind what is now celebrated as the world’s largest office annexe, inaugurated by Prime Minister Narendra Modi on December 17, 2023.

The bourse is designed to house a total of 4,500 offices of which only 150-175 are operational presently, said an official close to the development.

“The promoters of Kiran Gems and Diamonds had given a commitment that they would set up their operations at SDB and as part of that they have begun their full-fledged operations here. At this time, it is the responsibility of the committee to ensure that their operations go on smoothly. For this, the Diamond Bourse Committee suggests Kiran Gems and Diamonds to continue their operations in Mumbai as well,” said a letter written by SDB dated January 19 which was addressed to promoters of Kiran Gems and Diamonds. HT has seen a copy of the letter.

“Kiran Gems and Diamonds has re-opened its office in Mumbai today. The suggestion to do so was given by SDB committee members. The operations of Kiran Gems and Diamonds are huge hence we have requested them to temporarily keep their Mumbai office open for operations as well. On May 10, 80% of the 982 offices where interior work is being done, will be complete and the bourse will be ready. They can leave the Mumbai operations then,” said Dinesh Navadiya, media spokesperson for SDB.

There has been stiff competition between SDB and BDB – the latter offers amenities for international buyers but faces space constraints. The office spaces are also expensive compared to SDB. Diamonds are transported by trains from Surat to Mumbai, which takes about four hours.

In the case of Surat, the city already houses 10,000 diamond offices in established hubs of Varachha, Mahidhapura and Katargam – all are at least 30 kilometres from SDB, with poor public transport.

“The diamond business demands discretion, keeping clients confidential and away from the prying eyes of competitors. In Surat, many diamond barons maintain expansive corporate offices in the city, resembling luxurious star hotels in both amenities and size. Although they have reserved spaces at the SDB these industry leaders prefer to conduct their operations from their longstanding premises,” remarked an industry expert who preferred to remain anonymous.

On June 27, 2023, Lakhani took the initiative to encourage diamond companies to relocate from Mumbai to Surat. In letters addressed to these companies, he proposed the closure of offices in Mumbai and urged them to make the shift to Surat. As an incentive, a generous offer was extended, providing a year’s maintenance free of cost for those making the move. Additionally, companies opting for this transition were promised prominent recognition, with their names displayed prominently near the reception area at the SDB.

Kiran Gems and Diamonds had shut down its office in Mumbai two months ago and shifted most of its employees to Surat. The company had also built a housing society in Surat with 1,200 units for its employees. Calls made to Lakhani on his phone were not returned.