Titan increases its stake in CaratLane

It will own a 98.3 per cent stake in CaratLane post the deal

Titan increases its stake in CaratLane

Titan , a leading player in the Indian branded jewellery segment, will acquire an additional 27.2 per cent stake in CaratLane, a chic jewellery brand. Post acquisition, Titan will own a 98.3 per cent stake in CaratLane (at present, it owns 71.9 per cent). The deal will cost Titan around Rs 4,621 crore. It will finance the acquisition through a combination of cash, accruals and debt. Moreover, the acquisition is expected to be completed by October 31, 2023, subject to completion of some regulatory approvals.

A brief history of CaratLane-Titan partnership

CaratLane started as a purely online brand in 2008. It aimed to capture the fast-growing Indian market for affordable jewellery. Titan noticed the brand and made its first investment in 2016. Over the years, this partnership has evolved into a recognisable brand.

CaratLane's performance over the years

Financials FY23 FY22 FY21
Revenue (₹ cr) 2168.81 1255.63 715.7
Profit after tax (₹ cr) 82.08 89.29 1.62
ROCE (%) 23.1 18.2 10
Number of stores 222 138 117
ROCE is return on capital employed

Rationale behind this move

The deal will cost the company around Rs 4,621 crore; it has Rs 3,507 crore worth of cash and cash equivalents as of March 2023. With this acquisition, Titan aims to further strengthen its partnership with brands like Tanishq (a CaratLane brand). The backing of the Tata Group will also augment CaratLane's growth. While the share price has not seen much movement, the market's overall mood remains positive about this development.

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