Caratlane

Fair trade regulator Competition Commission of India (CCI) on Tuesday cleared the acquisition of additional stake purchased by Titan in CaratLane. CaratLane is engaged in the business of manufacture and sale of gems and jewellery in India. The combination relates to the acquisition of 27.18 per cent share capital of CaratLane (a subsidiary of Titan) by Titan Company Ltd, on a fully diluted basis, from Mithun Padam Sacheti, Siddhartha Padam Sacheti, and Padamchand Sacheti, according to a release. Titan, a joint venture between the Tata Group and the Tamil Nadu Industrial Development Corporation (TIDCO), is active in several businesses through lifestyle brands, including jewellery, eye care, fragrances, and fashion accessories. In August, jewellery maker Titan announced that it is going to increase its stake in its subsidiary and new-age jewellery brand CaratLane to 98.28 per cent by acquiring an additional 27.18 per cent for Rs 4,621 crore. CaratLane was started as a purely online

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Sontalia said that Caratlane ended FY23 with a 9 per cent EBITDA margin, he believes there is room for it to grow as 75-80 per cent is diamond jewellery

Although the Rs 4,621 crore deal may weigh on Titan's earnings in the short-term, analysts are positive on the long-term prospects

The transaction is anticipated to be finalised by October 31 of this year, subject to regulatory approvals

Upon completion of the deal, Titan will hold 98.28 per cent of equity in CaratLane-a private company engaged in the manufacture and sale of jewellery

Titan has entered into a share purchase agreement to acquire all of the 91,90,327 equity shares held by the founder of CaratLane Trading Private Limited and his family members

According to the original deal between Titan and CaratLane, Titan can acquire the remaining business of CaratLane. However, it has to be done at a value agreed upon by both parties

CaratLane is eyeing a 56% jump in revenue at Rs 500 cr for FY19, from Rs 320 crore the previous year