The Hindu Business Line : Arvind Mills to buy entire stake in arm from ICICI Ventures

The Sanjay Lalbhai-managed Arvind Mills owns the remaining 46.6 per cent stake in the company, which is the country's second largest branded apparel maker.

ICICI Ventures picked up majority stake in Arvind Brands on the back of a convertible debt in May 2004. At the time of transaction, it was stated that Arvind Mills will in future acquire an additional 5 per cent stake in Arvind Brands, thereby bringing its holding in the company to 51 per cent and reducing ICICI Venture's stake to 49 per cent. In this context, Arvind Mills' move to buy back the entire shareholding from the financial partner has come as a surprise.

Speaking to Business Line, Mr Darshan Mehta, President, Arvind Brands, said the development was "a huge vote of confidence by the parent in the company's business" and clearly recognises the potential in the domestic branded apparel market.

"We are in a relentless growth phase, which requires continuous capital infusion, and the transaction augurs well for Arvind Brands," he added. Observers said Arvind Mills' stabilised cash flow situation, on account of the robust global denim demand, would have favoured Mr Lalbhai's decision to mop up the entire shareholding.

Arvind Brands, with a portfolio of leading formalwear and casualwear names such as Arrow, Lee, Tommy Hilfiger, Wrangler and Excalibur, saw its top line revenues jump 43 per cent in the last financial year, 2004-05, to touch Rs 315 crore.

Mr Mehta said the company is projecting top line revenues of Rs 435 crore in the ongoing financial year with the branded apparel market tipped to grow at about 15 per cent annually.

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page