India-focused private equity firm Nalanda Capital has acquired additional 3.73 per cent equity stake in Mumbai-based Lovable Lingerie Ltd from the open market for Rs 20 crore ($3.25 million), according to a disclosure to the Bombay Stock Exchange (BSE).
As on September 30, 2013, Nalanda India Equity Fund Ltd, a part of the Singapore based PE firm which invests in small to mid-cap public listed companies in India, held 5.64 per cent in Loveable Lingerie. With the fresh investment, its total shareholding in the women’s innerwear manufacturer has increased to 8.79 per cent.
Shares of Lovable Lingerie rose in the early morning trades on Friday, but were quoting at Rs 300.75, a drop of over 2 per cent in late afternoon trading on BSE in a weak Mumbai market.
Nalanda Capital had started buying shares of the firm around a year ago from the market where it is estimated to have put around Rs 25 crore. With the fresh share purchase, it has now committed around Rs 45 crore in the second bet on the sector.
It had previously invested in Page Industries, a licensed manufacturer of the Jockey brand of innerwear for men and women in India, Sri Lanka, Bangladesh and Nepal, where it is sitting on a multi-bagger.
In March 2011, Lovable Lingerie raised Rs 93 crore from its IPO. In a pre-IPO investment, Sequoia Capital infused Rs 20 crore and later picked up shares from the market, thus increasing its holding to 11.27 per cent in the company.
Lovable Lingerie, founded in 1987, is promoted by L Vinay Reddy and has several brands such as Lovable, Daisy Dee and College Style. The company operates three manufacturing facilities—two in Bengaluru and one in Uttarakhand.
Lovable Lingerie reported 13.6 per cent growth in top-line to Rs 151.1 crore in FY13 but profit after tax slipped 12.8 per cent to Rs 18.9 crore during the year as the firm completed its capex cycle and reworked the distribution network.
Its net profit in the second quarter of current fiscal fell to Rs 4.3 crore from Rs 4.6 crore, while its net sales grew to Rs 40 crore against Rs 34.4 crore in the year-ago period.
(Edited by Joby Puthuparampil Johnson)