Manyavar looks to expand aggressively

Private Equity (PE) fund companies are making a beeline for buying a stake in the ethnic wear brand Manyavar but founder Ravi Modi is reluctant. As per media reports, several global PE firms, sovereign funds and mid-market growth funds have shown interest in investing in Manyavar and even approached bankers in Mumbai and Kolkata. However, Modi doesn’t want to dilute any more of his stakes in the company.

It is believed that Kolkata-based investment bank Resurgent India has been approached by several funds who are keen to acquire a stake of 10-15 per cent. A Mumbai-based investment banker believes that Manyavar can easily fetch a valuation of five times sales or 15-17 times Ebitda which would be in the range of Rs 2,700-Rs3,000 crore. According to the investment banker several PE funds are keen to acquire about 10 per cent stake in Manyavar.

In February this year, Premji Invest, an existing investor in ethnic wear brand Fabindia, bought an 8 per cent stake from LVMH Moet Hennessy Louis Vuitton SE’s PE fund L Capital Asia Advisors. The deal would have valued the Fabindia at about Rs 4,500 crore.

Manyavar was founded in 1999 under Modi’s company Vedant Fashions. Today, the brand has more than 400 stores and hopes to take it to 600 by 2020. Vedant Fashions has been posting 40 per cent year-on-year growth through the past five years. The company was expected to post sales of Rs 550 crore and earnings before interest, tax, depreciation and amortisation (Ebitda) of Rs 160 crore in the fiscal year to 31 March.

The brand recently set up its first international store in Dubai and now has plans to expand to the US and the UK.