Titan trades higher upon acquisition news of a US-based company

Titan trades higher upon acquisition news of a US-based company

by 5paisa Research Team Last Updated: Dec 15, 2022 - 09:00 pm 35.1k Views
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The acquisition is expected to be completed by 15th March 2022.

Titan Company Limited, an Indian luxury products company announced today that it has made an investment of USD 20 million in Great Heights Inc via its wholly-owned subsidiary TCL North America Inc (TCLNA).

With a cash investment of USD 20 million, TCLNA shall acquire up to 17.5% voting rights in Great Heights. It should be noted that this transaction does not fall under the purview of ‘Related Party Transactions’.

Why this acquisition?

Incorporated in 2019, Great Heights Inc is a Delaware Corporation whose primary business is retailing Lab Grown Diamond (LGD) Jewellery via its brand Clean Origin. Its turnover in last 3 years has grown from USD 11 million in 2019 to USD 25 million in 2021.

The strategic investment in this company will provide Titan with a ring-side view of the fast-growing Lab Grown Diamond (LGD) and Direct to Consumer (D2C) sectors. The acquisition is expected to be completed by 15th March 2022.

Established in 1984, Titan company Ltd started as a watch manufacturing company which was initially named Titan Watches Limited. Over the years, the company expanded into the segments of watches, jewellery, eyewear, fragrances and accessories.

In Q3FY22, on a consolidated basis, the company’s net revenue increased by 36.73% YoY to Rs 9,903 crore. Nearly 90% of the revenue was generated by the jewellery business segment.

During the quarter, the PBIDT (ex OI) went up by 70% YoY to Rs 1,442 crore whereas its corresponding margin expanded by 324 bps YoY to 14.37%. The PAT experienced a surge of 90.94% YoY to Rs 1,012 crore, while the corresponding margin expanded by 312 bps YoY to 10.08%.

At 11.55 am, the shares of Titan Company Ltd were trading at Rs 2476.60, which was an increase of 0.39% from the previous day’s closing price of Rs 2,467 on BSE.

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