In just 10 days, yet another diamond firm in the world’s largest diamond cutting and polishing centre in Surat defaults on payments worth over Rs 400 crore on Monday.
It was on June 19, a diamond firm had defaulted on payments worth over Rs 300 crore due to the rough diamond dealers in Surat, Mumbai and Antwerp.
Market sources said that the second consecutive default by the diamond firm has jolted the Rs 90,000 crore diamond industry in the city. In the last 10 days, two diamond firms have defaulted on the payments worth over Rs 700 crore.
The company located at Mini Bazaar in Varachha was into diamond business since two decades.
Sources said the company owners had purchased rough diamonds in huge quantities from Surat, Mumbai and Antwerp last year. The prices of rough diamonds fell by nine per cent in the last few months, eroding the profitability for the company. Even prices of polished diamond reduced by 22 per cent giving further jolt to the company.
In the last one-and-a-half-year, diamantaires have lost close to Rs 2,100 crore. While around Rs 1,300 crore worth of defaults have been reported from Surat, defaults totaling Rs 800 crore also occurred in Mumbai.