CaratLane employees to receive Rs 340-380 crore from ESOPs, after sale to Titan
A salesperson arranges wristwatches inside a Titan World showroom in Ahmedabad, India, July 12, 2022.
CaratLane employees are expected toreceive Rs 340 crore to Rs 380 crore in employee stock ownership plan (ESOP) payouts as Titan is in course of acquiring the remaining stake in the jewellery start up, Moneycontrol reported.
In total, CaratLane has about 1,500 employees, the most of whom work in the manufacturing and retail segments, and do not hold stock in the company. Instead, they receive bonuses and promotions.
About 400 workers make up the startup’s corporate team, where providing ESOPs was a more common practice. 75 of the 400 employees own shares in CaratLane, which are currently valued between Rs 340 and Rs 380 crore, or roughly 1.72 per cent of the company.
Employees at CaratLane will have their shares purchased by Titan, which plans to acquire a 100 per cent stake in the enterprise. It has been raising its investment already. Titan now owns 71.09 per cent of CaratLane and is getting ready to pay Rs 4,621 crore to acquire the remaining 27.18 per cent from the company’s founder and CEO, Mithun Sanchetti and his family. This will bring Titan’s total ownership in the jewellery firm to 98.28 percent. The acquisition is expected to be complete by October 31, 2023, following regulatory approvals.
For Titan to acquire complete ownership of CaratLane, just the ESOP pool will be remaining.
“The ESOP component (of 1.72 percent in the company) will also be bought out at the same time by the end of October. A bunch of it will be done by then and whatever remains, Titan will buy as and when the vesting happens,” Moneycontrol quoted Sanchetti as saying.
The rationale behind the acquisition
The Tata group firm Titan Co Ltd had initially acquired 62 per cent stake in CaratLane for Rs 357.24 crore on July 14, 2023. Titan gave an explanation regarding its decision, saying: “We believe the synergies with the jewellery business of Titan Co is very high.”
It further stated that CaratLane is a well-known brand and company in the online jewelry market that serves a distinct clientele and has strong internal capacities in design, manufacturing, technology, and e-commerce.
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