CaratLane employees to rake in Rs 340 cr-Rs 380 cr from ESOPs after Titan deal: Report

The employees of CaratLane, a leading online jewellery retailer in India, are set to experience a massive windfall after its sale to Titan Company Limited, said a report.  Over 70 CaratLane employees will receive a total of Rs 340 crore-Rs 380  in Employee Stock Ownership Plan (ESOP) payouts as part of the deal that involves Titan acquiring the remaining stake in the online jewellery startup CaratLane, reported Moneycontrol on Monday.

ESOP refers to the shares that employees own in the company they work for. CaratLane had offered ESOPs to its employees as a way to incentivise them and reward them for their hard work.

The employees who are eligible for the ESOP payout are those who have been with the company for at least five years. They will receive the payout in the form of shares of Titan, which is the parent company of CaratLane, said the report.

CaratLane was founded in 2008 by Mithun Sacheti and Srinivasa Gopalan, and since its inception, it has positioned itself as a disruptive force in the traditional Indian jewellery market by offering an online platform for selling diamonds and jewellery. Over the years, it has grown phenomenally and currently boasts a base of over four lakh customers.

The deal with Titan Company Limited, a part of the prestigious Tata Group, bodes well for CaratLane and its employees. ESOPs are often used as a strategic tool to retain and incentivise employees.

CaratLane boasts of 1,500 employees in which most of them are in the retail and manufacturing part of the business and don’t have shares in the company. They are, however, rewarded with bonuses.

The remaining employees, numbering over 400, are members of the startup's corporate staff, where ESOPs were more commonly distributed. 75 of the 400 employees own CaratLane stock, which is now worth Rs 340 crore-Rs 380 crore and accounts for around 1.72 percent of the company. The exact payout per employee would depend on the number of vested shares held by each.

Titan on Saturday announced increasing stake in its subsidiary and new-age jewellery brand CaratLane to 98.28 per cent by acquiring an additional 27.18 per cent share for Rs 4,621 crore.

The Tata group-managed firm has entered into a share purchase agreement with CaratLane founders -- Mithun Sacheti and Srinivasa Gopalan -- and their family members to acquire all the shares held by them representing 27.18 per cent, taking its total holding to 98.28 per cent, said a joint statement.

"CaratLane is a subsidiary of the company and on completion of the aforesaid share purchase would result in an increase in shareholding of the company in CaratLane from 71.09 per cent to 98.28 per cent on a fully diluted basis," it said.

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