Titan has agreed to buy a further 27.18 percent stake in online jewellery retailer CaratLane for Rs 4,621 crore in a deal that values the company at Rs 17,000 crore, according to regulatory filings.
In what is the second biggest e-commerce exit after Walmart bought 77 percent in Flipkart for $16 billion in 2018 giving Sachin Bansal and Binny Bansal an exit, CaratLane founder Mithun Sancheti and his family have sold their stake in the online retailer.
Titan currently holds 71.09 percent of the total equity share capital of CaratLane on a fully diluted basis. The proposed acquisition would further increase company’s stake in CaratLane to 98.28 percent.
The transaction will be subject to completion of customary regulatory approvals and closing conditions and is expected to be financed through a combination of cash balances, internal accruals and debt, Titan said, adding that only approval from the Competition Commission of India is needed.
CaratLane is an unlisted private company engaged in the manufacture and sale of jewellery and is a subsidiary of Titan.
For FY22-23, the turnover of CaratLane was Rs 2,177 crore. The transaction values the company at 7.8 times its FY23 sales. This is at a slight premium to how the market values Titan itself – 7.07 times its FY23 sales.
CaratLane started as a pure online brand in 2008. Titan first invested in CaratLane in 2016 and over the past eight years, in partnership with Tanishq, the brand has grown at a rapid pace. In the last three fiscal years, its sales has grown at a CAGR of 74 percent, albeit on a low base of Covid-affected year.
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"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.
"Having dreamt of making beautiful jewellery accessible and affordable to all, I am immensely proud of what we have collectively achieved at CaratLane in the past 15 years and where the business stands today,” said Sacheti.
“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 omni-channel jewellery brand.”
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