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Tata Group company Titan has agreed to acquire the remaining 27.18 per cent stake in its subsidiary CaratLane for ₹4,621 crore in cash. The latest transaction will ascribe a valuation of ₹17,000 crore to CaratLane.
The omnichannel jewellery brand’s founder Mithun Sacheti and his family have sold their stake in the company.
Founder’s exit
The deal ranks as the second-largest exit for an e-commerce founder after Flipkart founders Sachin Bansal and Binny Bansal sold their stakes to Walmart.
In a regulatory filing, Titan said that it was acquiring 91.90 lakh equity shares in CaratLane, following which it will hold a 98.28 per cent stake in the company. It currently holds 71.09 per cent of the total equity share capital of CaratLane on a fully diluted basis.
The transaction will be subject to the completion of customary regulatory approvals and closing conditions. It is expected to be financed through a combination of cash balances, internal accruals and debt, said Titan in its filing.
Titan’s dominance
“We have great faith in the India Consumer story and believe that the growth journey of CaratLane has only begun and has a long way to go. We thank Mithun Sacheti, Founder and Managing Director ofCaratLane for having jointly built a customer-centric brand that all of us in Tata Group can be proud of and wish him continued success in his future endeavours,” said CK Venkataraman, Managing Director, Titan.
“Looking into the future, there couldn’t be a more ideal destination for CaratLane than Titan and the esteemed Tata Group who will provide the perfect opportunities for CaratLane to continue to grow from strength to strength. I whole-heartedly thank Titan as well as extend my heartfelt gratitude to colleagues, partners and million+ customers whose support and love has paved the way to our success and made it India’s largest digitally native omnichannel jewellery brand,” said Sacheti.
Financial details
In FY23, CaratLane recorded a turnover of ₹2,177 crore, a 72 per cent jump from ₹1,267 crore it clocked in FY22. In FY21, CaratLane recorded revenues of ₹723 crore.
Titan first invested in CaratLane in 2016, which had been in a strategic vendor relationship with Tanishq since 2010. Between 2016 and 2019, Titan bought shares of the omnichannel retailer in tranches, mainly via a secondary purchase of shares.
The shares of Titan closed 0.76 per cent down at ₹3,049.15 at the Bombay Stock Exchange (BSE).
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