Titan Company Ltd, the Tata Group’s watch and jewellery retailing arm, said Saturday it has agreed to acquire Caratlane Trading Pvt Ltd founder Mithun Sacheti’s 27.1% stake in the jewellery etailer for Rs 4,621 crore ($556 million).
This is possibly the largest exit in the direct-to-consumer (D2C) space and also the second-largest liquidity event for a founder in India after Flipkart founders Sachin Bansal and Binny Bansal’s exit from the ecommerce company.
Titan said its stake in Caratlane will increase to 98.28% from 71.09% after the acquisition. The transaction is 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.
Titan had bought a 62% stake in Caratlane seven years ago from US-based hedge fund and venture capital investor Tiger Global for about Rs 357 crore ($53 million back then). The transaction valued the e-tailer around Rs 576 crore. Tiger Global likely managed to pull out almost the same money it invested in Caratlane over a five-year holding period.
The latest transaction values Caratlane around Rs 17,050 crore, or about $2 billion.
“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,” said CK Venkataraman, managing director at Titan.
Caratlane, which was launched in 2008, claims itself to be the country's largest omni-channel jeweller, with presence in 66 cities through 165 retail stores, as per its website. It competes primarily with the likes of Bluestone and Melorra.
Caratlane’s revenue has surged in recent years, to Rs 2,177 crore for 2022-23 from Rs 1,267 crore in 2021-22 and Rs 723 crore the year before. It generated revenue of Rs 141 crore in 2015-16, the financial year before Titan first bought a stake in Caratlane.
Titan, a joint venture between the Tata Group and the Tamil Nadu Industrial Development Corporation (TIDCO), launched its operations in 1987 under the name Titan Watches Ltd.
In 1994, Titan diversified into jewellery and subsequently into eyewear segments. Titan has also created lifestyle brands across different product categories including fragrances (SKINN), accessories and Indian dress wear (TANEIRA). The company has been bullish on wearable as a segment, both organically and inorganically.
In February 2020, the company had acqui-hired smart devices manufacturer Hug Innovations Inc. as part of its strategy to focus on the fast-growing wearables market. The division also entered the new category of audio accessories by launching over-the-head headphones and truly wireless earphones.
Avendus advised Caratlane founder and his family on the latest transaction.
