RedTape Limited shares experienced a remarkable surge of nearly 16% during Tuesday's trading session on BSE, driven by reports of potential stake acquisition discussions with prominent private equity firms. The fashion and lifestyle brand's stock performance reflects investor optimism about the proposed investment from global financial giants.

Stock Performance and Market Response

RedTape Limited shares demonstrated strong market momentum, with the stock closing at ₹129.95 on BSE, representing an increase of approximately 12% from the previous closing price of ₹116.30. The company currently maintains a market capitalization of ₹7,183.70 crores.

Private Equity Interest and Divestment Process

According to a Reuters report, footwear and apparel brand RedTape is actively evaluating investment proposals from private equity giants Blackstone and KKR & Co. The founding Mirza family is considering selling a controlling stake or potentially their entire shareholding, with the transaction valued at approximately $510 million.

The divestment process has reached a structured phase with the appointment of Ernst & Young as the exclusive financial adviser. EY has approached both Blackstone and KKR to assess their interest in acquiring the family's stake. The process remains in its early stages, with the company currently seeking non-binding indicative bids from potential investors.

Financial Performance Highlights

RedTape demonstrated robust financial growth in Q2 FY26, showcasing strong operational efficiency and market traction. The company's revenue performance and profitability metrics indicate healthy business fundamentals.

The year-on-year revenue increase of 16% from ₹416 crores to ₹492 crores demonstrates the company's ability to expand its market presence effectively. Similarly, net profit growth of 22% from ₹25 crores to ₹28 crores reflects improved cost efficiency, steady margins, and strong retail traction across its network.

Retail Network and Business Model

RedTape operates an extensive retail network spanning across India, with a presence in 20 states and 3 Union Territories. As of Q2 FY26, the company manages a total of 623 stores across various retail formats, demonstrating a diversified and well-distributed network.

The company operates primarily under the "Company Owned and Company Operated" (COCO) model of retailing, providing direct control over customer experience and brand positioning. RedTape has established itself as a comprehensive family fashion destination, offering footwear, apparel, and accessories for men, women, and children across all age groups.

Source: https://tradebrains.in/stock-skyrockets-16-after-kkr-and-blackstone-likely-to-buy-stake-in-the-company/

Indian footwear manufacturer RedTape 's founding family is exploring a significant stake sale to global private equity giants Blackstone and KKR, with the transaction potentially valued at up to $509.42 million, according to sources and documents seen by Reuters.

Transaction Details and Valuation

The Mirza family, which founded RedTape in 1996, has appointed global consultancy Ernst & Young as the exclusive financial adviser for the divestment of their stake, according to a December document detailing the planned transaction. The family currently holds a 71.8% stake in the company and is exploring options ranging from a majority stake sale to divesting their entire holding.

Ernst & Young has reached out to private equity firms Blackstone and KKR to explore potential offers, with the process currently seeking non-binding indicative offers. While two sources indicated the family is eyeing at least a majority stake sale, they noted the possibility of selling the entire stake if a favorable deal emerges.

Market Position and Growth Prospects

RedTape operates in India's rapidly expanding footwear sector, competing with global giants including Nike, Adidas, Bata India, and Campus Activewear. The Indian footwear market is projected to grow at 11% annually, reaching $21 billion by 2028, according to market research firm 1Lattice.

The company has established a strong retail presence with over 600 stores across India and maintains international operations in 14 countries, spanning Australia, Britain, the United States, Europe, and West Asia. RedTape has diversified its product portfolio beyond its popular leather shoes to include sneakers, shirts, wallets, and belts.

Financial Performance

RedTape's recent financial performance shows mixed results, reflecting broader market challenges:

The company's shares have faced pressure since early 2025, declining 43% in the previous year, which may be influencing the family's decision to explore strategic options.

Industry Context

The potential RedTape transaction aligns with a broader trend of family-run Indian companies attracting foreign investment due to their strong domestic market positions. This follows similar high-profile deals, such as Singapore's state investor Temasek acquiring a 10% stake in Haldiram's snacks business, valuing that company at approximately $10 billion.

The founding family members, including Managing Director Shuja Mirza and Chairman Rashid Ahmed Mirza, have not responded to requests for comment regarding the transaction. Ernst & Young and KKR declined to comment, while Blackstone did not respond to queries about the potential deal.

Source: https://www.cnbctv18.com/business/founders-of-indias-redtape-eye-stake-sale-tap-blackstone-kkr-says-report-ws-l-19820126.htm