Outside, in the Ashoka Hotel portico where the 6-day gold fair is about to close, dozens of Honda Cities and Hyundai Accents compete with Zens and lesser cars. Wriggling out of them are eager middle-class women with nothing but jewellery on their minds. Not one might make it to Page 3. But MMTC chairman and managing director SD Kapoor isnt complaining. Weve sold (bullion and jewellery) more than Rs 10-crore already! he exclaims. Having spent Rs 1 crore in organising the exhibition, Kapoor wont make much profit. But his boys have picked up tips for a knowledge book that can help them survive in a fierce world. Every evening, insight is pooled on just how the daughters and bahus preferred lighter and more hollow stuff. Or when a shopper fell short of Rs 60,000 how a GM simply escorted her to her Vasant Vihar home, got the remaining money, and won a customer for life. Next day, the lady was back for more!
MMTC director of export trade BBL Madhukar sees the gold rush as a function of the dwindling of competing options like fixed deposits and realty. See how (gold) demand is galloping in Japan!. Sitting next to Madhukar, Canadian Jocelyne Guertin of the Conseillere Municipale Quarteir Souvenir la Belle confirms how the younger generation in her country doesnt value gold yet. They havent seen a war! At $310 per troy ouncethats 10 per cent more than last yearMadhukar wont suggest bullion as a short-term investment.
Besides jewellers and an occasional MP like Amar Singh, many men here are MMTC general managers. Eighteen of them stand behind the regional counters, suffering a new market reality. At a Jhaveri or a Mehrasons, sheer packaging and designs rule. At the family jeweller, it is trust that matters. What doesnt is that each MMTC ornament is hallmarked or that the company is Indias largest bullion trader. This has two explanations. First, people like to live in a virtuous cycle of trust that sometimes spreads over several generations. Second, they like to pay in cash.
Now, MMTC is a candidate for disinvestment. But Kapoor says he will compete. Accordingly, his main communication goal is built around purity. And though his company is state-owned, cash is perfectly acceptable. The inhouse joke is that someone pulled out a wad of currency, and when the billing assistant asked for a name, she imaginatively said, Sonia Gandhi! Point taken. So much for unnecessary questions. Yes, (only) 20 per cent of the transactions are through demand drafts or credit cards, informs Kapoor. Master and Visa cards account for the rest. We arent here to set up jewellery shops or to annoy the local jewellers. But direct customer interaction are the prism we need to look at our basic business in bullion, says Kapoor.
MMTC is one of 17 agencies in the country which can import precious metals. On a turnover of Rs 7,200 crore, the share of precious metals is Rs 4,800 crore. This includes trade in 105 tonnes of gold and 500 tonnes of silver. Recent trends show that nearly 25 per cent of the countrys gold trade of 40,000-crore is accounted for by re-use of existing jewellery.