ChrysCapital close to buying Mufti denims brand for Rs460-500 crore
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Mumbai: Private equity firm ChrysCapital Advisors LLP is in advanced talks to buy Credo Brands Marketing Pvt. Ltd, which owns denim wear brand Mufti, two people aware of the development said.
The deal is likely to be signed for Rs460-500 crore, the first person said on condition of anonymity. Mumbai-based Credo Brands, founded by Kamal Khushlani in 1998, makes T-shirts, shorts, sportswear and blazers. Khushlani holds a 65% stake in the company while private investors hold the rest.
“Both Khushlani and private investors are ready to sell the entire stake in the company and the deal is in advanced stage. An exclusivity agreement has been signed with ChrysCapital,” said the second person, also declining to be named.
JM Financial Institutional Securities Ltd was given the mandate to find a buyer for the business. Mint reported in September last year that Credo shareholders planned to sell a controlling stake in the company and had hired JM Financial Institutional Securities Ltd to find a buyer. Besides Khushlani, Credo’s other investors include Brand Capital, the ad-for-equity investor from Bennett, Coleman and Co. Ltd (BCCL). Brand Capital and friends of Khushlani together own 35% in the company.
Spokespersons for JM Financial and ChrysCapital declined to comment. Emails, text messages and calls made to Khushlani remained unanswered, at the time of going to press. Emails sent to Sundaram Sivakumar, chief executive of Brand Capital, did not elicit any response.
The Mufti brand is available at 110 large format stores, 1,400 multi-brand outlets and 250 exclusive brand outlets in India, according to the company website.
Credo’s promoters have been trying to help its investors sell their holdings since 2013. The company was in talks with US-based private equity (PE) firm Carlyle Group which agreed to invest Rs200-250 crore in Credo, Mint reported in March 2014. However, the deal was called off at the final stage.
The denim wear market in India is projected to grow at a compound annual growth rate of 15% to reach Rs27,200 crore by 2018, according to a 2015 report by retail consulting firm Technopak Advisors. Leading brands in India’s denim wear market include Levi’s, Lee, Wrangler, Spykar, Numero Uno and Killer.
In 2014, India-focused PE fund Avigo Capital exited denim maker Spykar Lifestyle by selling its 30% stake to non-resident Indian businessman Apurv Bagri. Bagri’s Metmin Investment Holdings, which already owned 30% in Spykar, bought another 30% from Avigo Capital.
India’s apparel space has been on the radar of venture capital and PEs firms in the past few years. Private equity (PE) funds Kedaara Capital and L Catterton are in separate discussions to buy a minority stake in Vedant Fashions, owner of ethnic wear brand Manyavar, Mint reported on Monday. The PE firms plan to buy a stake of about 15% in Vedant Fashions for Rs450-500 crore, at a valuation of Rs3,000 crore, the report said.
In October last year, Multiples Alternate Asset Management Pvt. Ltd, a private equity (PE) fund led by Renuka Ramnath, acquired a 10% stake in branded apparel company Arvind Ltd—which sells apparel brands Calvin Klein, Tommy Hilfiger, US Polo Assn., Ed Hardy, Arrow, Gant and Nautica in India—for Rs740 crore.
In August last year, US-based PE firm TA Associates Management Lp invested $140 million for a minority stake in TCNS Clothing Co. Pvt. Ltd, a leading women’s apparel platform that sells popular fashion brand W.