CaratLane promoters may hold up to 20% stake post Titan buyout

Promoters of Chennai-based online jewellery portal CaratLane are likely to retain up to 20 per cent stake after the acquisition by Titan.

Last Friday, the board of Titan had informed the stock exchanges about its decision to pick up a majority stake in the eight-year- old company promoted by Srinivasa Gopalan (an IT entrepreneur who was the founder and CEO of Lister Technologies) and Mithun Sacheti (scion of Jaipur Gems).

Sacheti, Co-Founder and CEO, CaratLane, told Businessline , “Our stake will not be a minimum one of 5-10 per cent but much more and could go up to 20 per cent. We will retain our brand CaratLane and it would co-exist with Tanishq and the rest of the Titan-owned brands like Mia and Fastrack.’’

Titan had been buying solitaires from CaratLane for its Tanishq brand and had been negotiating with the promoters for the past several months to restructure the deal to buy them out since it already had an existing investor, Tiger Global, from whom it had to buy stake. The US-based hedge fund had made four rounds of investments in the company since 2011. “There is still no clarity when our existing investor Tiger Global will make a complete exit since it has made secondary investments into the company,’’ Sacheti added.

After almost a year of negotiations with Titan, CaratLane was hoping the deal would fructify by the end of last year. But early this year Sacheti had said, “We have already raised $30 million from Tiger Global in the last round and it has an equal stake in the company which is owned by myself and my co-promoter. Even if Titan does not invest, we always have a back up plan ready.’’

Driving synergies between Titan and CaratLane, the purpose of the acquisition will be to drive scale in retail and improve the digital capabilities.

“Titan always wanted to have an omni-channel presence and its dreams of maximising distribution and digital influence will now come true. It will now be in a position to give more digital choices to its customers through us,’’ said Sacheti.

Apart from having an online presence, CaratLane also has 15 standalone stores which will be doubled this year. “We plan to take up our store count from 15 to 30 this year,’’ added Sacheti.

Meanwhile, CaratLane’s nearest competitor Bluestone, which as Ratan Tata as investor, expects the Titan deal to be positive for the category.

“When the only national offline player decides to buy into the largest online player, it raises the confidence of investors in the jewellery segment. Ratan Tata has invested in our company in his personal capacity and will continue to advice us since he has steered the Titan brand,’’ said Gaurav Singh Khushwaha, Founder & MD, Bluestone.