VIP Industries , Asia's largest luggage manufacturer, is set for a significant ownership change as its promoter group plans to sell a 32% stake to a consortium led by Multiples Private Equity. The deal, which could reshape the company's future, has sparked investor interest and market speculation.

Key Highlights of the Deal

• The promoter group of VIP Industries has agreed to sell up to 4,54,46,305 equity shares, representing approximately 32% of the company's total paid-up share capital.
• The sale will be made to a consortium including Multiples Private Equity Fund IV, Multiples Private Equity Gift Fund IV, Samvibhag Securities Private Limited, and individual investors Mithun Padam Sacheti and Siddhartha Sacheti.
• The transaction is priced at INR 388.00 per share, valuing the deal at up to INR 1,763.32 crore.

Impact on Shareholding Structure

The deal will significantly alter VIP Industries' ownership structure:

Open Offer and Management Control

• Following the transaction, the Multiples Private Equity consortium will be required to make an open offer to acquire an additional 26% stake from public shareholders.
• The open offer price is set at INR 388.00 per share, the same as the deal price with the promoter group.
• Upon completion, the consortium is expected to gain management control of VIP Industries.

Market Reaction

The news of this significant ownership change has impacted VIP Industries' stock price. The company's shares fell over 5% following the announcement, reflecting investor uncertainty about the future direction of the company under new management.

Future Outlook

Mr. Dilip Piramal, the current Chairman of VIP Industries, commented on the deal: "We are pleased to welcome Multiples consortium as strategic partners in the Company. This marks an important step toward reviving the company's strong legacy and helping it regain its foothold in the Indian luggage market, where it has struggled in recent years."

Ms. Renuka Ramnath, Founder, MD and CEO of Multiples Alternate Asset Management, expressed optimism about the acquisition: "Multiples is excited to lead the ownership transition of the very strong legacy business of VIP and further build on its rich heritage and unlock its next phase of growth."

The deal is subject to regulatory approvals, including clearance from the Competition Commission of India. Once completed, it could potentially bring fresh strategies and resources to VIP Industries, aiming to strengthen its position in the competitive luggage market.

As the luggage industry continues to evolve, especially in the post-pandemic travel landscape, this change in ownership could mark a new chapter for VIP Industries, a brand that has been synonymous with Indian travel for decades.

VIP Industries , a leading luggage manufacturer, has announced significant changes in its ownership structure and leadership. The company's promoter group has agreed to sell a substantial stake to a consortium led by Multiples Private Equity, potentially reshaping the future of this iconic Indian brand.

Ownership Transition

The Dilip Piramal family, which has been at the helm of VIP Industries for decades, has entered into a definitive agreement to sell up to 32% of their stake in the company. The buyers, collectively referred to as the Multiples Consortium, include:

• Multiples Private Equity Fund IV
• Multiples Private Equity Gift Fund IV
• Samvibhag Securities Private Limited
• Individual investors Mithun Padam Sacheti and Siddhartha Sacheti

This transaction will trigger an open offer, as mandated by SEBI regulations, allowing the Multiples Consortium to acquire an additional 26% stake from public shareholders. The open offer price has been set at ₹388.00 per share, valuing the potential 26% stake at approximately ₹1,437.78 crore.

Leadership Changes

In a parallel development, VIP Industries has appointed Dilip Piramal as Chairman Emeritus. This move recognizes Mr. Piramal's long-standing contribution to the company while paving the way for new leadership under the incoming investors.

Financial Implications

The share purchase agreement involves the sale of up to 4,54,46,305 equity shares, representing about 32% of VIP Industries' total paid-up share capital. The transaction price of ₹388.00 per share values this stake at approximately ₹1,763.32 crore.

Future Governance

Upon completion of the transaction, the Multiples Consortium will acquire management control of VIP Industries. The shareholders' agreement outlines several key governance changes:

1. The Multiples Consortium will have the right to nominate the majority of directors to the company's board.
2. Dilip Piramal retains the right to recommend one independent director or nominate a family member as a non-independent, non-executive director.
3. The existing promoter group entities and Dilip Piramal will have voting obligations aligned with the Multiples Consortium on most matters, with some exceptions.

Market Impact

This transaction marks a significant shift in the Indian luggage industry landscape. VIP Industries, with its strong brand portfolio including VIP, Skybags, Carlton, Aristocrat, and Caprese, has been a market leader in Asia and the world's second-largest luggage maker.

Renuka Ramnath, Founder, MD and CEO of Multiples Alternate Asset Management, expressed enthusiasm about the deal, stating, "Multiples is excited to lead the ownership transition of the very strong legacy business of VIP and further build on its rich heritage and unlock its next phase of growth."

Regulatory Approvals

The completion of this transaction is subject to necessary regulatory approvals, including clearance from the Competition Commission of India.

As VIP Industries embarks on this new chapter, stakeholders will be watching closely to see how the company leverages its strong brand legacy under new ownership to navigate the evolving luggage and travel accessories market.