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PremjiInvest eyes minority stake in Wildcraft

LiveMint logoLiveMint 12-09-2017 Kavya Kothiyal

Mumbai: PremjiInvest, the family investment arm of Wipro chairman and billionaire Azim Premji, is in talks to acquire a 10-15% stake in Wildcraft India Pvt. Ltd, a Bengaluru-based adventure equipment and outdoor gear firm, said two people familiar with the development.

For the minority stake, PremjiInvest will invest about $15 million (Rs100 crore), one of them said on condition of anonymity.

“In this latest round of investment, the company is valued at $150 million, and this is primary fund-raising, and no existing investor will make part-exits,” the person added.

Started in 1992 by Dinesh K.S., Wildcraft offers shoes, jackets, rucksacks, sleeping bags, tents and hiking accessories. It has two manufacturing plants—in Bengaluru and Himachal Pradesh—and employs around 2,500 people. It has over 160 stores in 65 cities and towns, and also exports its wares.

The firm expects to earn Rs550-600 crore in revenue in 2017-18, up from around Rs400 crore in the current financial year, said a Mint report in March.

“We have a four-year target now of being at about Rs1,000 crore and the mix would be in the range of 50:50 or 60:40 between gear and apparel-footwear,” said co-founder Siddharth Sood in the report.

Roughly 70% of Wildcraft’s product portfolio today is made up of outdoor gear, 20% is clothing and 10% is footwear.

In 2013, Silicon Valley-based venture capital firm Sequoia Capital invested $11 million (Rs70 crore) in Wildcraft to acquire a 20% stake.

Emails seeking comments from Wildcraft India did not elicit any response while Rajesh Ramaiah, chief financial officer at PremjiInvest, replied saying, “We do not make any comments to media regarding our deals or portfolio companies.”

“While the unbranded market is almost three times the size of the branded segment, it is growing in low single-digit rates, while brands are reporting double-digit year-on-year sales growth. This is also aided by modern retail channels, for whom luggage is one of the high-growth and healthier margin categories,” said Devangshu Dutta, chief executive at consultancy Third Eyesight.

“Modern retail chains have quoted category sales growth rates ranging from 25% to 40% year-on-year—this could also be due to greater amount of space being allocated to the category,” Dutta said.

VIP Industries is the market leader in the Indian bags and luggage segment, followed by Samsonite, according to data from Euromonitor.

“As disposable incomes are rising, more people are travelling, which is having a positive impact on sales of bags and luggage,” said the September 2016 report.

“India is also set to see 24 million outbound tourists by 2021, thereby presenting favourable prospects for the luggage industry in India in the future,” it added.

Besides private equity firms, global strategic investors are also keen to tap the fast-growing luggage and backpack industry.

Samsonite International SA has been looking for buyout opportunities in India to expand its footprint.

Many PE and venture capital firms are now seen to be bullish on the luggage and backpack market.

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