In 2008, the now 45-year-old Mithun Sacheti, founder of jeweller CaratLane, convinced his parents, who owned Jaipur Gems, to allow him to start a lower-priced jewellery brand. They gave him ₹75 lakh and four years to succeed; if not, he was to wind up and return to his first vocation. “It was a challenge to get my family on board,” he says.
But he did succeed, with Titan Co, which had taken a majority stake in 2016, buying out his remaining stake of 27.18 per cent for a whopping ₹4,621 crore. “I’m proud that I built a business which will flourish and there couldn’t be a better family than Titan; with a million customers a year and 225 CaratLane stores, I am sure Titan will take it to newer highs,”Sacheti told businessline.
Sacheti, who says he’s passionate about jewellery design and manufacturing, is wistful when he says things evolve and change, and perhaps an individual’s and a group’s journey together is not meant to last, and Titan felt that now is the right time to do it (buy out the stake). “It’s a 30x return in six years; it’s an insane return if you think about it,” he says.
Tryst with Chennai
Sacheti, a BCom graduate of Mumbai’s Sydenham College and an executive MBA from IIMB, has a graduate degree in gemology from the Gemological Institute of America in California. “That course was the difference that I could provide to the customers of Chennai that others couldn’t,” he explains. His tryst with Chennai, the third-largest market for gold jewellery, began in year 2000 when he moved from Mumbai to start a brand of Jaipur Gems on Chennai’s Cathedral Road, the same main street where Tanishq also started its first jewellery store.
But, as he says, Jaipur Gems targeted the top-end of customers. “I was inaccessible to a large audience. I had to work towards solving that problem. I targeted an average selling price of ₹25,000 and chose every day diamond jewellery at a price point others couldn’t offer at. The audience we were going after were spending significant time on the Internet; by 2005-06 broadband was available easily. I thought the phone is the new TV and we were going to reach out to people through the web.”
The business was kicked off with an additional investment of ₹26 lakh by Srinivasa Gopalan whom Sacheti bought out in 2018 for ₹50 crore. Tiger Global believed in Sacheti’s vision and also invested $50 million in all, a stake which Titan acquired in 2016 for ₹357 crore.
While Carat Lane was conducting a B2B business with Titan, Sacheti would sound out the company if they would invest in the company. The tipping point was when former MD, Bhaskar Bhat, visited Carat Lane in Chennai. Recalls Bhat: “It was a complementary business to Titan. CaratLane was born a digital company and Titan was still building the digital business. We also bought into a new segment of the jewellery business with a younger target audience, which gave us a competitive edge.” After years of making losses, CaratLane turned profitable in 2020 and notched up ₹160 crore EBIDTA and ₹2,177 revenues last year.
Now, investing in high growth companies is an area he will look at, which he learnt from his avowed mentor, the late Rakesh Jhunjhunwala. He has also sponsored a business called Oro, which has currently installed 800 lockers and will loan against gold deposited in these lockers. “I was a sponsor of this idea, but three other co-founders are running this business,” he says. He will now look to strike gold in his next venture.