The firm has appointed investment bank Arpwood to help it with the stake sale, the people said, speaking on the condition of anonymity. “Early days. We will have to see how the deal progresses,” said one of the persons cited above.
Last year, the company was in advanced talks with global private equity firm Advent International to sell controlling stake, Mint had reported. “The deal did not go through due to various reasons, including valuation mismatch,” the second person cited above said.
The deal, likely to be signed soon, comes almost a year after the Piramal-led promoter group decided to pare stake. “The deal has been revived and Advent is the frontrunner,” the first person cited above said.
Emailed queries to Dilip Piramal did not elicit any response. An Arpwood spokesperson declined to comment.
Also read | How VIP is trying to shed its baggage
Mint was first to report the promoter’s plan to sell the controlling stake in the luggage maker in October 2023.
According to the data available with the exchanges, the promoters own a little over 50% of VIP Industries, the owner of luggage brands such as VIP, Carlton and Skybags. With VIP’s market capitalization at ₹4,048.98 crore as on Thursday’s close, the promoters’ stake is valued at about ₹2,024 crore.
VIP’s business
Since November 2024, the company’s stock has slid almost 40.11% till date. The company’s stock closed at ₹285.10 a share, rebounding from its 52-week low, on Thursday. The benchmark Sensex rose 7.2% during the same period.
“Top PE funds, both homegrown and global have been approached,” the third person cited above said, adding that since the deal involves a subsequent open offer to public shareholders of the company, it is going to be a complex one. “It’s a great brand that is fighting newcomers in the already crowded space.” the person said.
Also read | Will Vijay Kedia’s bet on VIP Industries prove to be expensive?
The revenue generated in the luggage and bags market in India stood at $15.04 billion in 2024, according to a latest report by Statista. It is expected that the market will experience an annual growth rate of 5.02% (CAGR 2024-2029). It is projected that 87% of the sales in the luggage and bags market will come from the non-luxury segment. Still, rising incomes, India’s growing middle class and increasing travel aspirations are driving a surge in demand for premium luggage and bags.
VIP Industries, a brand synonymous with the aspiring Indian travellers of the 90s, is much larger than its Indian rivals, except Safari Industries. VIP Industries, which holds a substantial market share in this rapidly growing sector, offers a lucrative opportunity for PE firms to tap the growing demand for travel-related products from India’s increasingly mobile middle class.
Over the years, VIP has grown organically and inorganically too. It acquired the London-based Carlton brand in 2004 and merged with Aristocrat Luggage Ltd in 2007.
According to Equitymaster, VIP Industries reported a loss of ₹12.4 crore in the quarter ended December, compared with a profit of ₹7.2 crore a year ago. Net sales declined 8.3% to ₹501.1 crore. For the year ended March 2024, VIP’s profit dropped 64.4% year-on-year ₹54.3 crore. Revenue of the company grew 7.8% to ₹2,245 crore FY24.
Also read | VIP Industries needs premiumization to pack a punch
Competition
With new startups emerging in the space to challenge the incumbents, the Indian travel and luggage space is heating up. Earlier this year, Mint reported on how new-age direct-to-consumer brands such as Mokobara, Assembly, Nasher Miles, Icon and Uppercase have secured funding from risk investors and are looking to disrupt the space.
India’s organised luggage market, dominated by VIP Industries, Samsonite and Safari, accounts for about 40% of the ₹15,000-crore luggage industry, according to a report by global analytics firm Crisil last year. It is mainly this segment that has boomed in the wave of the pandemic. According to an ICICI Securities report from 2024, VIP has close to 44% market share in the organized luggage category.
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