Jewellery and watches major Titan on Monday said it was acquiring a 67% stake in Dubai-based jewellery firm Damas for Rs 2,438 crore. Damas is part of the Qatar-based Mannai Corporation, which will cede voting rights to Titan following the deal. Titan will also have the right to acquire the remaining 33% stake after December 31, 2029. The deal will be funded through internal accruals, cash and debt, it said.
The acquisition will give Titan a bigger presence in West Asia, where its flagship Tanishq brand has 13 stores, including 10 in the UAE, two in Qatar and one in Oman. Damas, on the other hand, has 146 stores across the UAE, Saudi Arabia, Qatar, Oman, Kuwait and Bahrain. It has both in-house as well as international labels and is a known name in the region, experts said.
GCC expansion strategy
“The acquisition creates a significant new global opportunity for Titan,” CK Venkataraman, MD, Titan said. “It also enhances Titan’s overall position in the jewellery market in the GCC (Gulf Co-operation Council) region and brings in synergy benefits in talent, retail networks and supply chain,” he added.
In a conversation with FE earlier, Venkataraman had said that Titan had significant plans for expansion of its jewellery retail business in international markets. Apart from West Asia, the company had identified North America, UK, Singapore & South East Asia among regions where it would push its presence, he said. The company currently has around 24 stores in international markets, according to industry experts including 13 in West Asia, around 7-8 stores in the US and one in Singapore.
West Asia, in particular, the GCC region, is a big market for jewellery retailers, given its size and presence of a large diaspora population as well as people of other nationalities, industry experts said. The market is estimated at Rs 1.21 lakh crore in terms of size, growing at around 6% per annum. By 2033, it is likely to touch Rs 1.8 lakh crore, according to industry estimates.
While Kerala-based jewellery retailers have traditionally had a strong presence in the GCC region, Titan’s latest acquisition could increase competitive intensity, experts said.
Venkataraman said that the company was stepping out of its diaspora focus and looking to tap people of other nationalities and ethnicities with the acquisition. The region is exhibiting robust economic growth creating a demand for differentiated, high quality offerings, he said.
New diamond expertise centres
Closer home, Titan’s jewellery division has earmarked Rs 150-200 crore for new diamond expertise centres it is launching in partnership with De Beers at its Tanishq outlets this financial year, Ajoy Chawla, CEO of the jewellery division, said in a conversation with FE. The investment will be divided between the company and its franchisees. Titan is launching the initiative with De Beers.
As many as 500 Tanishq outlets in India will have these diamond expertise centres in two years, with 200 Tanishq stores targeted in the current fiscal, Chawla said.
“With the launch of the diamond expertise centres in partnership with De Beers, we are setting a new standard in natural diamond retailing. The process involves evaluating key aspects of a diamond including light performance, origin, inclusions, and laser markings. The investment per store works out to about Rs 80 lakh to Rs one crore for the equipment, getting professionals (such as gemologists) on board to man these diamond expertise centres,” he said.
Similar to karatmeters at Tanishq’s outlets, which check the purity of gold jewellery, diamond expertise centres will check whether diamond jewellery offered by customers is lab-grown or made of natural diamonds, its cut, clarity etc. Apart from Tanishq, the company may take this initiative to Zoya outlets as Titan seeks to make this an industry practice. It may also be taken internationally, Chawla added.