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Swarovski may buy 12% stake in Mumbai’s Tara Jewels; deal to value Rs 500 crore

Austria-based Swarovski Group is close to buying a minority stake in domestic jewellery house Tara Jewels, according to two people close to the transaction. This is the first such investment by the luxury and cut crystal products maker in India, which has annual sales of around 3 billion (about Rs 20,400 crore) worldwide.
While the exact financials are not available, people quoted above said Swarovski would be picking up a 10-12 % stake in the company, valuing it at around Rs 500 crore. Trilegal and Deloitte are advising Swarovski on the deal, these people said. Tara Jewels and Swarovski did not respond to email queries from ET.
Swarovski would hold the stake through its investment company, Crystalon Finanz, and the transaction would be a financial investment. It could not be confirmed if the stake sale would provide any agreement on the sale of products from either company’s outlets.
Swarovski’s products include a range of crystal glass sculptures and miniatures, jewellery and couture, home decor and chandeliers. The deal comes at a time when the Mumbai-based firm is at an advanced stage of launching its Rs 220-crore initial public offer, which is expected to hit the market in the next quarter.
Enam Securities and ICICI Securities are the book running managers for the issue. According to its draft red herring prospectus, the IPO would include Rs 150-crore fresh issue of shares and a Rs 70-crore offer for sale by the US-based Fabrikant, which until a few years ago was one of the largest importers of diamonds from India.
Fabrikant has been a strategic investor in the company since 2003 and owns 18% stake, while the balance is owned by the Indian promoters.
Founded by Daniel Swarovski in 1895, Swarovski Group had a turnover of 2.87 billion for the year ended December 2011, according to its website. It owns over 1,200 boutiques and over 1,000 partner-operated boutiques with production located in eight countries worldwide.
India is one of the fastest growing markets for luxury goods due to rising demand from high net worth individuals. Some of the recent entrants include LVMH, maker of Louis Vuitton bags, Richemont, Britain’s Burberry and Hermes and others such as Gucci, Chanel and Christian Dior.
Most foreign luxury good peddlers in India operate through JVs and have only a handful of outlets across the country.
Tara has four manufacturing facilities, including one in China. According to its website, it is one of the largest studded jewellery exporters from India since 2006 and employs around 1,800 people across four continents. It caters to retailers in countries such as the US, the UK and Europe.
Source: Economic Times

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