Titan, renowned jewellery and watch retailer, recently made headlines as it decided to increase its stake in CaratLane Trading Private Limited from 71.09% to 98.28%. This resulted in a nearly one percent jump in Titan’s share prices. Titan has signed a share purchase agreement with CaratLane to acquire all the shares held by them, representing a 27.18% stake for Rs. 4,621 Crore.
CaratLane, a subsidiary of Titan and an unlisted company specializes in the manufacturing and sales of jewellery. They had acquired a 62% stake in CaratLane in 2016 for Rs. 357.24 Crore.
Analysts believe that the increased stake in CaratLane can be a positive sign for Titan in the medium term. CaratLane is a high-growth business with a significant opportunity to generate healthy revenue and margins. However, this can be EPS dilutive in the short term for Titan. The valuation of CaratLane after this transaction is estimated to be at Rs. 17,000 Crores.
This move further establishes Titan’s vision of dominating the organized jewellery market in the country, especially in the e-commerce space.
