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The Competition Commission of India approves the acquisition of additional share capital in CaratLane Trading Private Limited by Titan Company Limited under Section 31(1) of the Competition Act, 2002. Titan Company Limited acquires an additional 27.18 percent share capital and increases its shareholding to 98.28 percent on a fully diluted basis. The competition authority concludes that the combination does not cause any appreciable adverse effect on competition in India. The order stands revoked if the provided information is incorrect.
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COMPETITION COMMISSION OF INDIA Combination Registration No. C-2023/10/1058
21^st^ November 2023
Notice under Section 6(2) of the Competition Act, 2002 given by Titan Company Limited
CORAM:
Ms. Ravneet Kaur
Chairperson
Mr. Anil Agrawal
Member
Ms. Sweta Kakkad
Member
Mr. Deepak Anurag
Member
Order under Section 31(1) of the Competition Act, 2002
On 3^rd^ October 2023, the Competition Commission of India (Commission) received a notice under sub-section (2) of Section 6 of the Competition Act, 2002 (Act) given by Titan Company Limited (Titan/Acquirer). The notice was given pursuant to the Share Purchase Agreement dated 19^th^ August 2023 executed between Titan, CaratLane Trading Private Limited (CaratLane/Target), and the sellers, which comprise of Mr. Mithun Padam Sacheti, Mr. Siddhartha Padam Sacheti, and Mr. Padamchand Sacheti (Hereinafter, the Acquirer and Target are collectively referred to as ‘Parties’).
The Proposed Combination envisages the Titan’s acquisition of additional 27.18% share capital of CaratLane, on a fully diluted basis, from the sellers. As a result of the Proposed Combination, the shareholding of Titan in CaratLane will increase from 71.09% to 98.28%, on a fully diluted basis and it will have sole control over the Target.
In terms of Regulation 14 of the Competition Commission of India (Procedure in regard to the transaction of Business relating to Combinations) Regulations, 2011 (Combination Regulations), vide letter dated 11^th^ October 2023, certain information and clarifications were sought from the Acquirer. The response dated 27^th^ October 2023 was submitted by the Acquirer after seeking an extension of time.
The Acquirer, a public listed company, is a joint venture between certain TATA entities^1 (collectively holding 25.02%) and the Tamil Nadu Industrial Development Corporation (TIDCO) (holding 27.88%). Titan commenced its operations in the year 1987 under the name Titan Watches Limited and has since diversified its operations in several product categories including, jewellery, eyecare, fragrances, fashion accessories, and Indian dress wear.
The Target, a subsidiary of Titan, is a private limited company engaged in the business of manufacture and sale of gems and jewellery in India. CaratLane has only one wholly-owned subsidiary namely StudioC Inc. It is incorporated in the United States of America and does not derive any sales in India.
It is submitted that the activities of the Parties exhibit horizontal overlaps at a broad level in the market for manufacture and sale of gems and jewellery in India (Broad Market) and at a narrower level in the organized segment for manufacture and sale of gems and jewellery in India (Narrow Segment).
The Commission decided to leave the delineation of the relevant market open, as it was observed that the Proposed Combination is not likely to cause an appreciable adverse effect on competition in any of the relevant markets in India.
^1^TATA entities are TATA Sons Private Limited (20.85%), TATA Investment Corporation Limited (2.01%), TATA Chemicals Limited (1.56%), Ewart Investments Limited (0.56%) and Piem Hotels Limited (0.04%).
Based on the submissions of the Acquirer, the Commission noted that the incremental market share in the Broad Market and Narrow Segment is insignificant. The combined market shares of the Parties in the Broad Market and Narrow Segment are in the range of [5-10]% and [15-20]%, respectively in terms of value. Further, there are other players present in the market such as Malabar Gold and Diamonds, Joyalukkas Jewellery, PC Jeweller, Amrapali Jewels, Tribhovandas Bhimji Zaveri Limited, Kalyan Jewellers, GRT Jewellers, Senco Gold & Diamonds, Thangamayil Jewellery, Bluestone, Candere, Orra, Giva, Mellora etc.
It is also submitted that a vertical relationship exists between CaratLane and the TATA group’s entities through an e-commerce platform TATA CLiQ, on which CaratLane sells its products. Based on the submission of the Acquirer it is noted that CaratLane’s sales through TATA CLiQ form a miniscule proportion of its own total sales. Further, its sales on TATA CLiQ is insignificant in terms of total sales on TATA CLiQ as well as total gems and jewellery sold on TATA CLiQ. Additionally, TATA CLiQ’s market share for online sales of gems and jewellery is also insignificant.
Considering the material on record, including the details provided in the Notice and the assessment of the Proposed Combination based on the factors stated in Section 20(4) of the Act, the Commission is of the opinion that the Proposed Combination is not likely to have any appreciable adverse effect on competition in India. Therefore, the Commission approves the Proposed Combination under Section 31(1) of the Act.
This order may stand revoked if, at any time, the information provided by the Acquirer is found to be incorrect.
The information provided by the Acquirer shall be treated as confidential in terms of and subject to provisions of Section 57 of the Act.
The Secretary is directed to communicate to the Acquirer accordingly.
