Sequoia Capital India's growth fund has picked up a 5.95% stake in a pre-IPO investment in Mumbai-based Lovable Lingerie Limited for Rs 20 crore. According to a statement, the deal involves SCI Growth Investments II picking up one million shares at a price of Rs 200 per share. The deal would value the firm on a post-issue basis at around Rs 336 crore.
The deal will also be the first disclosed transaction by Sequoia Capital after the recent departure of the Westbridge team.
Lovable, founded in 1987, is promoted by L Vinay Reddy and filed a DRHP last year. With this pre-IPO deal benchmark, the firm could be looking to raise anywhere over Rs 91 crore through the issue. Anand
Rathi Advisors Limited is the Book Running Lead Manager to the proposed IPO.
The company’s brands include 'Lovable', 'Daisy Dee' and 'College Style' which are retailed through 103 distributors in India. Lovable has three manufacturing facilities - two in Bengaluru, with an installed capacity of 60 lakh pieces p.a. and another unit in Uttarakhand with an installed capacity of 7.5 lakh pieces p.a. It recorded turnover of over Rs 86.95 crore and a net profit after tax of Rs 10.55 crore in FY10. This as compared to revnues of Rs 68.8 crore and net profit of Rs 2.83 crore in FY09. For the first nine months of FY11, it reported net sales of Rs 88.05 crore with a PAT of Rs 12.6 crore.
The firm will use the issue proceeds to set up a manufacturing facility to create additional capacity at Bangalore, where it will invest Rs 23 crore. Lovable also plans to invest Rs 25 crore in its joint venture Lovable Lifestyles Private Limited, which will market, manufacture, distribute and direct retail in the super premium lingerie segment. Lovable will hold 90% stake in the JV with London's Lifestyle Galleries. It will also spend additional amount on brand building and setting up exclusive brand outlets (EBOs).
Another PE investment in related area was when Nalanda India Fund picked up around a 10% stake in Page Industries, a licensed manufacturer of the Jockey brand of innerwear for men and women in
India, Sri Lanka, Bangladesh, and Nepal. Nalanda had picked up the stake in October 2008 at an average price of Rs 440-450, and is currently making over 3.65x (times) its investment. Page Industries
closed on Wednesday at Rs 1,645 per share.