Titan to Acquire CaratLane Staffers’ ESOPs for Rs 350 Crore
- ByStartupStory | August 22, 2023
Tata Group’s Titan, which is in the process of acquiring founder Mithun Sacheti’s stake in CaratLane for Rs 4,621 crore, plans to purchase employee stock options (ESOPs) of CaratLane employees for approximately Rs 350 crore. This move will elevate Titan’s ownership of CaratLane to 100 percent.
Reportedly, CaratLane employs about 1,500 individuals, most of whom do not hold shares in the company. Approximately 75 employees, however, possess shares valued between Rs 340 and Rs 380 crore, accounting for an estimated 1.72 percent stake in the firm, as per media reports. Currently, Titan holds a 71.09 percent stake in CaratLane, up from the 62 percent it acquired in 2016 when the company was valued at around Rs 563 crore. Upon acquiring Sacheti’s 27.18 percent stake, Titan’s ownership would rise to 98.28 percent, valuing the company at nearly Rs 17,000 crore.
The transaction is expected to conclude by October 31, subject to regulatory approvals. CaratLane’s plans to buy out ESOPs come at a time when the frequency of employee stock buyback programs has decreased.
In the first half of 2023, only nine companies announced liquidity programs worth over $40 million, a significant decline from previous years. In 2021, the volume of ESOP liquidity programs crossed the $400 million mark, and this figure exceeded $300 million in 2022, according to data from the equity management platform Qapita.
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