Arvind to raise Rs 740 crore from Multiples Equity via stake sale in brands arm
The textiles-to-apparel major also reported a 19 percent increase in consolidated Q2 revenues at Rs 2,331 crore
Textiles and branded apparel major Arvind Limited on Tuesday announced a 10 percent stake sale in its brands arm, Arvind Fashions, to the Renuka Ramnath-led PE firm, Multiples Equity.
“We’ve been growing our brands business over the years,” said Sanjay Lalbhai, CMD of Arvind Limited at a press conference in Mumbai. “The valuation or the enterprise value has been worked out as Rs 8,000 crore. We’ll be getting about Rs 740 crore.” The funds will be used for retiring some long-term debt and improving the firm’s debt-to-Ebitda ratio, he added.
Multiples Equity, for which this is the second investment in Arvind Limited, will receive a board seat at the subsidiary level.
Although Arvind Limited’s core textiles business still constitutes the largest chunk of revenues, the company has looked to expand the purview of its operations. “We were known as a denim company. But not anymore,” said Lalbhai. “We have a very robust portfolio in various businesses.” Its brands portfolio includes global brands like Calvin Klein, Tommy Hilfiger, Gant and Nautica.
For the quarter ended September 30, 2016, the consolidated revenues for the textiles-to-brands player stood at Rs 2,331 crore, up 19 percent year-on-year (YoY). Consolidated net profit stood at Rs 72 crore.
“Our textiles business, which recorded 9 percent revenue growth, continues to deliver a strong performance as we continue to pursue a calibrated growth strategy,” said Jayesh Shah, director and CFO at Arvind Limited, in a press release.
The brands business, meanwhile, grew 33 percent sequentially in the three months.
