Stake Sale: The promoters of India's largest luggage and travel accessories maker VIP Industries are considering to sell the company's stake reported Mint. As per the report the deal which includes a potential open offer could be worth as much as $1 billion. The deal will see the exit of the promoters from the business.
The promoters have roped in the investment banking team of InCred Capital to manage the sale.
Mint quoted an Investment Banker who is aware of the deal and said that Private Equity firms are most likely interested in the deal due to India's growing travel market.
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The travel industry in India is growing rapidly due to increased income, an expanding travel infrastructure and growing online booking. This leads to a rise in demand for luggage. As per Mint,
VIP Industries, which holds a substantial market share in this rapidly growing sector, offers a lucrative opportunity for PE firms to tap the burgeoning demand for travel-related products from India’s increasingly mobile middle class.
“Indians are travelling more. Having a single suitcase or satchel for travel at home will no longer suffice for the growing Indian middle class. PE firms interested in the Indian consumer will consider this aspect when bidding for the asset," an investment banker aware of the deal told Mint.
The banker further added that the deal might take a few months to complete the transaction.
Over 50% of VIP Industries is owned by Dilip Paramal led promoters group. The market value of VIP Industries is around ₹9,310 crore, valuing the promoters’ stake at about ₹4,650 crore. Funds acquired by Premji Invest acquired a 1.66% stake from the promoters of VIP Industries in September 2021. As per ICICI Securities analyst report, VIP has close to 44% market share in the organized luggage category.