Kolkata-based jeweller Senco Gold Ltd, which listed on the public markets last year, has placed a bid to acquire omnichannel jewellery retailer Melorra as it seeks to expand its presence in the e-commerce space, four people aware of the development told Mint.
Senco is likely to acquire Melorra in a deal valued at ₹40-50 crore, one of them said, adding, however, that the valuation was still being negotiated and the deal size could change as the discussions progress.
The listed gold retailer is one of several potential buyers Melorra has been in talks with in recent months, the second of the four people said. “The company needs capital, and talks have been ongoing…” the person said, adding that the deal has not been finalised.
Due diligence is currently on and a deal will be confirmed upon satisfactory completion of the process, said a third person.
Senco and Melorra did not respond to Mint’s queries.
Senco’s managing director and chief executive Suvankar Sen has announced during a press briefing in September that the company derived about ₹30 crore of it revenue from e-commerce, and that it planned to boost its online sales.
Senco, which was incorporated in 1994 and competes with BlueStone and the Tata Group-owned CaratLane in the online space, on Wednesday reported a 27% year-on-year retail growth for the second quarter. It attributed the growth to rising gold prices amid central bank buying, the US Federal Reserve’s rate cuts, and geopolitical tensions.
Melorra in distress
Founded in 2015 by Saroja Yeramilli, Melorra is a direct-to-consumer online jewellery retailer. The company has raised about $88 million in equity funding from investors including Lightbox, BlackSoil, and Symphony Asia Holdings, according to data platform Tracxn.
Melorra last raised $22 million in April 2022 at a valuation of about $312 million.
However, the company’s health has since deteriorated. In FY22, Melorra’s operating revenue grew 4.6x to ₹364.4 crore, but it came on the back of rising losses, which surged 73.5% to ₹106.7 crore driven by rising expenses and cash outflows.
The company has still not posted its financial results for FY23 and FY24.
Melorra’s valuation also reportedly dropped to a tenth in a bridge funding round of $1.1 million by existing investors in June this year. In September, The Morning Context reported that Melorra had stopped paying its employees.
Shining competition
Over the past year, the e-commerce jewellery space has been seeing heightened competition, with multiple new players entering the segment and raising funds from investors.
In February, the Tata Group’s Titan Company Ltd fully acquired jewellery brand CaratLane following a gradual stake increase from a 62% shareholding in 2016, marking the first instance of a legacy brand purchasing an e-commerce retailer. Titan also owns the Tanishq brand.
“With India’s growing disposable income, many brands have catered to certain segments but are now seeing competition from new entrants across various categories,” said an early-stage consumer tech investor.
The investor, declining to be identified, added that the market is ripe for disruption by new-age brands addressing specific needs that existing players are not meeting. “This dynamic is shaping the sector,” the investor said.
In September, Giva a new-age omnichannel jewellery company, raised ₹100 crore (about $12 million) in an extended Series B round from Premji Invest. In 2024, other similar jewellery brands including Kushal’s, Aukera, Trisu, Salty, and Eternz have also successfully raised capital.
Senco shares have more than doubled this year and were marginally higher at ₹1,420.00 apiece in afternoon trading on NSE.
