Gold bond shines with 128% tax-free return in 8 years but a jeweller wins hands down
Gold Bond investors, who had made the right decision eight years ago, are elated as the safe haven has ended up delivering a solid tax-free return of 128% besides an annual 2.5% interest. But equity bulls betting on a gold jeweller, with over 844 branches at last count, have managed to outshine even the yellow metal with a fascinating 801% return.
No points for guessing that the stock we are talking about is Titan, which runs four jewellery brands — Tanishq, Mia, Zoya and Caratlane.
The Tata Group company also sells other lifestyle products but derives around 87% of its EBIT from jewellery business alone.
Riding high on the back of a structural shift in consumer preferences for standalone old-fashioned 'sonaar' to large branded retail jewellery chains, Titan shares have rallied around 801% ever since the first batch of gold bond was released.
From a market capitalisation of just about Rs 33,731 crore before November 30, 2015, it has now crossed the Rs 3 lakh crore milestone to become India's 17th most valued stock.
On the other hand, gold bond investors had bought the first tranche of SGB at Rs 2,684 per gram. The price for the final redemption, which is happening today, has been fixed at Rs 6,132 per unit of SGB based on the simple average closing price of gold for the week November 20-24, 2023.
This translates into a neat capital gain of 128% or Rs 3,448 per unit.
