Kasliwals are looking to raise Rs 500 crore (~$110 million) through fresh issue of shares in a public float of Reid & Taylor, a separate garment company which sells brands such as Reid & Taylor and Stephen’s Brothers. The IPO will also see Singapore’s sovereign wealth fund GIC part exit its investment in the company along with some share sale by the promoter firm S. Kumars Nationwide Ltd.
GIC had invested Rs 900 crore(~$200 million) in the apparel firm two years ago in one of the biggest such deals related to the textile sector. It had invested through Indivest Pte Ltd, an affiliate of GIC Special Investments and holds 25.61% of the company at present. Its average cost of acquisition of shares is pegged at Rs 262 a piece.
The promoter company S. Kumars Nationwide is also selling part of its holding and if the acquisition cost for GIC is taken as a benchmark for the eventual pricing of the issue, the promoter will pocket over Rs 310 crore in the public offer. GIC will pocket over Rs 78 crore in the issue by selling less than 10% of its holding.
Reid & Taylor intends to use the funds from fresh issue of shares to set up 160 exclusive brand outlets, put up a manufacturing unit at Bengaluru for ready-made garments and suits, to purchase machinery at the Mysore facility, to fund the launch of a new brand in the casual premium segment, to implement an ERP System and about a fifth of the sum to be raised for pre-payment or repayment of certain loans.
For the year ended March’10 the company had total income of Rs 1,150 crore with net profit of Rs 202 crore. For the half year ended September 30, it had total income of Rs 632 crore with net profit of Rs 113 crore.