CaratLane Employees Weighed In Gold: Company To Pay About Rs. 380 Crore ESOP

Titan and CaratLane recently cracked a deal in a record time of 7 minutes. CaratLane, the popular start-up of India has been acquired by Titan. As the deal is locked, CaratLane employees are going to get a whole lot of benefits from this deal. They will be paid an amazing amount of Rs 340 crore-Rs 380 crore in the employee stock ownership plan (ESOP).

A total of 1,500 people work for CaratLane, the bulk of whom are employed by the company’s manufacturing and retail divisions and do not own shares. Instead, they only receive raises and bonuses as compensation.

CaratLane shareholder-employees

The startup’s corporate team, which includes the 400 or so remaining employees, used to give ESOPs more frequently. 75 out of the 400 employees own shares in CaratLane, which are currently worth between Rs 340 and Rs 380 crore and represent around 1.72 percent of CaratLane.

Employees of CaratLane will sell their shares to Titan, which plans to possess a 100% stake in the enterprise. Already, it has been raising its investment. Titan now owns 71.09 percent of CaratLane and is getting ready to pay Rs 4,621 crore to Sachetti and his family for a further 27.18 percent interest, bringing its ownership in the jewelry start-up to 98.28 percent. Subject to regulatory approvals, the transaction is anticipated to completion by October 31, 2023.

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ESOP Pool

Only the ESOP pool will be left once Titan has a 100 percent ownership stake in CaratLane.

“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,” Mithun Sachetti, co-founder and CEO of CaratLane.

ESOP cashouts have already led to $1.46 billion of wealth in the hands of startup employees since the beginning of 2021.

Since the beginning of the year, ESOP cashouts have resulted in $1.46 billion of wealth being distributed to startup employees.Until a few years ago, ESOPs were less appealing to startup employees unless you were talking about a well-established company like Flipkart. Employees of the startup were initially uncertain as to whether the options would convert into a real stake and eventually into money.

ESOPs, Titan, CaratLane, employees, crore, Mithun Sachetti,