BackTano buys stake in luggage maker Safari
The luggage maker will use the proceeds from the equity sale to strengthen distribution and advertising
Premium
Mumbai: Luggage maker Safari Industries (India) Ltd has sold 25% stake to Tano Capital LLC for ₹ 50 crore, three people close to the development said. An official announcement is expected on 16 July.
“An extra-ordinary general meeting for shareholders’ approval is scheduled for 16th July. The stake diluted will be between 20% and 25%," said Nishant Tiwary, senior vice-president, investment banking at Edelweiss Financial Services Ltd. Edelweiss was the sole adviser for the transaction.
Safari Industries, led by Sudhir Jatia, former managing director at VIP Industries Ltd, manufactures travel bags and is the third-largest luggage maker in India after Samsonite and VIP. After a seven-year stint at VIP, Jatia bought a majority stake in Safari in 2011 for about ₹ 29 crore. Jatia will also infuse ₹ 20 crore in the business, along with Tano.
A mail sent to Safari seeking comment remained unanswered.
Tano Capital is an alternative asset management firm. Founded in 2004 by Chuck Johnson, formerly co-president of Franklin Templeton Investments and chief executive of Templeton Worldwide Inc, Tano invests in rapidly growing companies in India and China that will directly benefit from domestic consumption growth in both markets.
The proceeds from the equity sale will be used to strengthen distribution and advertising.
“This (deal) would help in further penetrating the distribution channels and driving greater profitability for the business by improving the working capital cycle," Tiwary said.
The organized consumer luggage industry size in India is ₹ 1,900 crore and is expected to grow at an 18% compounded annual growth rate.
“Apart from demographic advantages, the company is set to gain from improving economy and consumer confidence, increasing travel and product premiumization," Tiwary said. As on 31 March, Safari’s revenue stood at ₹ 43.78 crore and the promoter held 74.99% stake in the firm.
Shares of Safari Industries closed down 2.98% at ₹ 645.45 on BSE on Monday, while the BSE’s benchmark Sensex ended up 0.53% at 26,100.08.
Unlock a world of Benefits! From insightful newsletters to real-time stock tracking, breaking news and a personalized newsfeed – it's all here, just a click away! Login Now!
