VIP Industries Stake Sale: For years, there is now a big change in the VIP industries present through suitcases, briefcase in the homes of many Indians. The company’s promoter Dilip Piramal and his family are selling up to 32 percent stake. It will be sold to the Alternate Asset Management Company called Multiples. Dilip Piramal & Family has made a definitive agreement with multiples consortium for stake sales. The consortium includes Multiples Private Equity Fund IV, Multiples Private Equity Gift Fund IV, Samvibhag Securities, Mithun Padma Sawhati, Sachati, Sacheti and Profitex shares and securities.
With this deal, the story of a well -known brand older over 55 years old is suddenly taking a new turn. Bags, suitcases, trolley bags, briefcases, backpacks, handbags VIP industries are not only India but also Asia’s biggest luggage manufacturer. It is second among the luggage manufacturers in the world. The foundation of VIP Industries was in 1968, when it was incorporated by Aristo Plast Vip Industries. In 1981, its name was changed to VIP Industries Ltd.
Sometimes there was every suitcase and briefcase Vip
At one time, its popularity in the country was so much that the other name of suitcase and briefcase was VIP. But now VIP Industries has been struggling in India’s luggage market for the last few years. The company wants to strengthen its grip again. The company has strict competition with Samsonite and Safari Industries. VIP Industries has brands like Aristocrat, VIP, Carlton, Skybags and Capris. It had more than 50 percent stake in the branded luggage market in FY 2023-24. However, now its market share is gradually decreasing due to hard competition.
The company started in 1971. VIP Industries with Mumbai headquarters has over 10,000 retail outlets in 45 countries. The revenue of VIP Industries in FY 2024-25 was Rs 2,169.66 crore. The company’s market cap is Rs 6700 crore.
Why is the share being sold after all
Dilip Piramal says that his family is not very interested in running this business of the younger generation. The company has been struggling with management crisis for the last few years. In such a situation, the change in its ownership is also best. He also says that VIP Industries need only a good management. The company’s structure is in good condition to compile globally with a luxurious long term future.
Although the company has been a professional managing director since 1984, Dilip Piramal found that Professional Management is not able to run VIP industries properly. Dilip Piramal has three daughters from two weddings. She first married Geeta Piramal, with whom she has two daughters- Radhika and Aparna. But in 2005, both of them got divorced from their first wife. The same year Piramal married Shalini Aggarwal. He has a daughter- Priyadarshini from the second marriage. Dilip Piramal is the elder brother of industrialist Ajay Piramal. Anand Piramal, son of Ajay Piramal, is married to Isha Ambani, daughter of Reliance Industries chairman Mukesh Ambani.
Dilip Piramal regrets this
According to a CNBC-TV18 report, Dilip Piramal regrets why he did not exit by selling stake in VIP industries when its valuation was high. According to Piramal, “2 years ago the company’s stock was priced at ₹ 700, the market cap was ₹ 10,000 crore, and we got an offer at that price. But at that time my management felt that the share price would increase by 50% in six months or a year. But unfortunately, it did not happen.”
Talking about the share price, on July 17, BSE closed at Rs 474.75. Its 52 week high 589.95 rupees was seen on 24 September 2024. The stock has gained 66 percent in 3 months and 15 percent in 2 weeks.
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Dilip Piramal & Family will remain shareholder after selling 32 percent share
There will also be an open offer to get a 26 percent stake from the open market under the stake sales. On completion of the transaction, the company’s control will go to multiple equity. However, Dilip Piramal and his family will remain a shareholder in the company. Chairman Dilip Piramal will be the honorary chairman of VIP Industries. The open offer will be brought by Multiple’s Consortium to buy 3.70 crore shares from VIP’s public shareholders, for which the price will be Rs 388 per share. It is believed that the total payment from the multiple will be Rs 1437.78 crore by including the open offer.
Dilip Piramal will be the owner of 20% stake
After the completion of the deal, Dilip Piramal will have a 20 percent stake in the company. He will be promoters of the company, but will not be on the board. He also has the right to appoint a director in the company’s board. In an interview with CNBCTV18, Piramal said that he can include his wife on the board as a director so that he was a family member. After 5 years, Piramal will have to reduce its stake to bring below 8 percent. Then he will not remain promoters of the company as the stake will be below 10 percent.