Titan Co. is set to acquire the residual 27.18% stake in its subsidiary CaratLane Trading Pvt. for a cash consideration of Rs 4,621 crore.
The Tata Group company has signed a share purchase agreement with the founder of CaratLane, Mithun Sacheti, and his family members to acquire all the shares held by them, according to an exchange filing on Saturday.
Titan currently holds 71.09 % of the total equity share capital of CaratLane on a fully diluted basis. The proposed acquisition of 91.9 lakh equity shares would further increase the company's stake in CaratLane to 98.28%. The latest transaction will ascribe a valuation of Rs 17,000 crore to CaratLane.
The deal, subject to regulatory approvals, is expected to be completed by October 31, 2023, the company said in a statement.
"Titan has always prided itself in building strong brands that are amongst the leaders in their categories," said Titan's Managing Director C K Venkataraman. "We have great faith in the India's consumer story and believe that the growth journey of CaratLane has only begun and has a long way to go."
CaratLane started as a pure online affordable jewelry brand in 2008.
In 2016, Titan first invested in CaratLane and the brand has gained popularity over the past eight years.
In FY23, CaratLane's revenues have grown faster at 73% year-on-year than Titan's standalone jewellery revenue growth excluding bullion sales at 37%. As on March 2023, CaratLane's turnover stood at Rs 2,177 crore.
Currently, Titan offers jewellery to consumers through three brands — Tanishq, Mia, Zoya and CaratLane. Analysts consider CaratLane as Titan's most valuable subsidiary.
Titan's shares have risen 25% in the last one year.
"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," said Mithun Sacheti, founder and managing director, CaratLane.
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