Cartica Capital makes second consumer bet, buys 5% in Page Industries for $51M

Emerging markets-focused investment firm Cartica Capital has picked up 5 per cent stake through bulk deals in Page Industries, a licensed manufacturer of the Jockey brand of innerwear for men and women in India, Sri Lanka, Bangladesh and Nepal. The stake was picked up for Rs 317 crore ($51.2 million) from an institutional investor besides the promoters of the Nalanda Capital-backed company.

The shares were bought from HDFC Mutual Fund and promoter group members including Sunder Genomal, Ramesh Genomal and Nari Genomal. The deal would make Cartica Capital the second largest institutional shareholder after Nalanda Capital, which holds 9.96 per cent stake in the company and is sitting on nearly 12x profit in the company which sports a $1 billion market cap.

Page Industries scrip ended the day at Rs 5,585 a share, down 1.5 per cent on BSE in a strong Mumbai market on Monday.

For the first nine months of FY14, Page Industries reported a 36 per cent increase in revenues to Rs 904.4 crore as compared to the same period last year with a 33 per cent rise in net profit to Rs 118.66 crore. For Q3FY14, Page reported 40 per cent rise in net sales to Rs 302.51 crore with 36 per cent increase in net profit of Rs 34.63 crore.

Page Industries' product, Jockey, is retailed through 126 exclusive brand outlets and 25,000 + retail stores in 1200 cities and towns across India. As on December 31, 2013, Page Industries Ltd had over 16,000 employees, spread over nine state-of-the-art manufacturing complexes in Bengaluru and Hassan besides its sales and marketing team.

Another company in the innerwear segment that has attracted private equity interest is Lovable Lingerie, which counts Nalanda Capital and Sequoia Capital India as investors.

Among the privately held companies, Hinduja family-owned lingerie firm Gokaldas Intimatewear Pvt Ltd, which sells the Enamor brand in India, raised funding from India Alternatives. Peepul Capital also invested Rs 70 crore in lingerie and sportswear startup Brandis Manufacturing and Marketing.

The latest investment is the second major bet on the consumption sector by Cartica Capital, set up in 2008 by former International Finance Corporation (IFC) executives. Last year it picked up 5.68 per cent stake in TTK Prestige, one of the top small kitchen appliances firms in India, for Rs 230 crore.

Cartica focuses on public companies and manages investments for large US pensions like Calpers and the State of Wisconsin Investment Board. In India, Cartica's other investments include financial services companies such as Ratnakar Bank and Mahindra & Mahindra Financial Services.

(Edited by Joby Puthuparampil Johnson)

Leave Your Comment(s)