CCI Approval Clears the Way for Titan’s $2Bn Acquisition of Additional Stake in CaratLane

• ByStartupStory     |    November 22, 2023

The Competition Commission of India (CCI) has granted approval to Titan-backed Titan’s proposal to acquire an additional 27.18% stake in jewelry startup CaratLane. In a statement, CCI confirmed, “CCI approves acquisition of additional shareholding in CaratLane by Titan. The proposed combination relates to the acquisition by Titan of 27.18% share capital of CaratLane, on a fully diluted basis, from Mithun Padam Sacheti, Siddhartha Padam Sacheti, and Padamchand Sacheti.”

This paves the way for the deal announced earlier this year. In August, Titan revealed it had signed a share purchase agreement to acquire more shares in CaratLane for INR 4,621 Cr, valuing the startup at a significant INR 17,000 Cr ($2 Bn). Titan had initially acquired a majority stake in CaratLane in 2016 at a valuation of nearly $69 Mn.

With the deal now approved, employees are gearing up for a windfall, expected to receive between INR 340 Cr to INR 380 Cr from ESOP buyback by Titan, aiming to acquire a 100% stake in the startup.

Founded in 2008 by Sacheti and Srinivasa Gopalan, CaratLane is an omnichannel startup manufacturing and selling jewelry items in India and the US. In FY23, it reported a total income of INR 2,177 Cr, a 71% increase from INR 1,267 Cr in FY22.

Following the deal’s announcement, CaratLane witnessed a significant leadership change, with cofounder and COO Avnish Anand being elevated as the CEO in August, shortly after cofounder Sacheti’s exit. However, the deal faced challenges, with CaratLane challenging a show-cause notice issued by the Enforcement Directorate, alleging FEMA rule violations between 2011 and 2014. The startup sought legal counsel from a former Chief Justice of India, asserting that it did not violate FEMA, as the regulation applied to the B2B sector, not retail trade.

CaratLane will join other startups under the Tata Group’s nearly complete control, including 1mg and BigBasket.

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