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Arvind to dilute 10% stake in brand business arm
Oct '16
Arvind Limited, one of India's largest integrated textile and apparel Company, has today announced its decision to raise about Rs 740 crore by diluting 10 per cent stake in its brand business arm, pegging its enterprise value at Rs 8,000 crore. The entire stake will be picked up by Multiples, the private equity firm founded by Renuka Ramnath.
Arvind's brand portfolio business clocked a turnover of Rs 2,300 crore for the FY 2015-16. It is one of the fastest growing businesses in the country with a CAGR of 25 per cent for the past three years. The unmatched portfolio includes global marquee brands such as Calvin Klein, Tommy Hilfiger, US Polo Assn, Ed Hardy, Hanes, Arrow, Gant and Nautica, among others.
Commenting on the development, Sanjay Lalbhai, CMD of Arvind Limited said, “We are delighted to have Multiples as an investor. This transaction reflects the confidence of the investor community in the overall business strategy, the robustness of the platform and quality of our leadership team. The deal is an important milestone in our journey to be a fashion, apparel and accessories powerhouse.”
“With India becoming the fastest growing economy in the world, we are confident of continuing this growth momentum and taking the business from over Rs 3,200 crore this year to Rs 9,000 crore by 2022. This transaction helps Arvind unlock the value that the brands business has accomplished in a short period and add financial muscle to future strategic opportunities for the Group. We will immensely benefit from our association with Multiples,” he added.
For the quarter ended September 30, 2016, Arvind has recorded 19 per cent growth in the consolidated revenue, which increased to Rs 2,331 crore. This figure was Rs 1,957 in the corresponding quarter of the previous year. Consolidated EBIDTA for the quarter increased by 2 per cent to Rs 232 crore as against Rs 228 crore in the corresponding quarter of the previous year. Profit after tax before exceptional items grew by 20 per cent to Rs 78 crore as compared to Rs 65 crore in the corresponding quarter of previous year. 
“Our textiles business, which recorded 9 per cent revenue growth, continues to deliver a strong performance as we continue to pursue a calibrated growth strategy. The brands business continues to demonstrate strong growth with 33 per cent growth in Q2. Our established power brands consolidated their market positions. We believe that we will have continued growth momentum in the second half of the current financial year,” commented Jayesh Shah, director and CFO, Arvind. (RKS)

Fibre2Fashion News Desk – India

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