VIP Industries Promoters to Sell 58% Stake to Multiples PE for INR 3,200 Cr
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Promoter group entities of VIP Industries have agreed to sell up to 58 percent stake in the luggage company to a consortium led by Multiples Private Equity for a total consideration of INR 3,200 crore, according to a stock exchange filing.
The transaction involves the sale of around 4.54 crore shares, or 32 percent of the company's total equity, by Kemp & Company, DGP Securities, Piramal Vibhuti Investments, Alcon Finance and Kiddy Plast. These entities are part of the promoter group and will transfer their holdings to Multiples PE funds along with Samvibhag Securities, Mithun Padam Sancheti and Siddhartha Sancheti for INR 1,763.3 crore.
Following this, the consortium will launch an open offer to acquire an additional 26 percent stake in VIP Industries. The offer is valued at INR 1,437.8 crore. Once the open offer is completed, the consortium will assume management and control of the company.
The shares are being sold at INR 388 apiece, which represents a discount of approximately 15 percent to the closing price of VIP Industries on the previous trading day.
As of March, DGP Securities held around 27 percent stake in the company, while Vibhuti Investments owned 15.7 percent. Kemp & Company, Kiddy Plast and Alcon Finance collectively held a little over 6 percent. Promoter Dilip Piramal directly holds a 0.5 percent stake.
A company release stated, "Upon completion of the transaction, control of the company will be transferred to Multiples Private Equity, while Dilip Piramal and Family will continue to be shareholders. Dilip Piramal will be Chairman Emeritus."
The new acquirers will have the right to nominate a majority of the board of directors. In addition, DGP will retain the right to recommend one independent director or nominate a family member as a non-independent non-executive director.
Speaking on the development, Dilip Piramal said, "This marks an important step toward reviving the company's strong legacy and helping it regain its foothold in the Indian luggage market, where it has struggled in recent years."
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