The Dilip Piramal family, promoters of one of India’s oldest luggage brands VIP, are cutting their stake in the company at a discount. The promoters are selling nearly 32% stake or 45.44 million shares in the company to a clutch of investors in an all-cash deal valued at Rs 1,763 crore, they said on Monday while spelling out the deal details, implying a per-share value of Rs 388. This is at a 15% discount to Friday’s close. The stake sale was first announced late on Sunday evening to the stock exchanges without specifying deal details.
The buyers include Multiples Private Equity, Samvibhag Securities, Mithun Sacheti (the founder of jewellery retail chain CaratLane) and his brother Siddhartha Sacheti. Calls and messages to VIP Industries chairman Dilip Piramal elicited no response till press time. Multiples PE founder, MD & CEO Renuka Ramnath did not respond to messages when contacted on Monday.
But the acquisition has triggered a mandatory open offer for an additional 26% stake (37 million shares) by the buyers, at a floor price similar to the acquisition price of Rs 388 a share, the company said on Monday. The buyers will fork out an additional Rs 1,437 crore for this transaction. Shares of VIP Industries wiped out all the losses in afternoon trade after falling nearly 5% in morning trade. It closed trade at Rs 482.15 apiece on the BSE, up 5.64% versus Friday’s close.
If fully subscribed, the buyers will acquire nearly 58% stake in the company at the end of the open offer, taking the total deal size to Rs 3,200 crore. The promoters will see their stake fall to 19.84% from 51.73% at the end of the March 2025 quarter.
While Multiples PE will acquire management and control of VIP Industries, Piramal will continue to remain a shareholder and stay on as chairman emeritus of the company.
In a prepared statement, Piramal said that the acquisition marked an important step towards reviving the company’s strong legacy. “It will help the company in regaining its foothold in the Indian luggage market, where it has struggled in recent years,” he said.
Ramnath said in the same statement that the ownership transition would help unlock VIP’s next phase of growth. She did not specify details.
Established in 1968, VIP Industries has been a key luggage, backpacks and handbags player, but in recent years has faced stiff competition from Samsonite at the premium end and Safari Industries at the mass end. New-age brands such as Mokobara, Nasher Miles and UpperCase have also been eating into the company’s market share, as consumer preferences undergo a change, thanks to growing digital and e-commerce penetration within the luggage market.
In five years, VIP industries has seen market share fall from levels of 47% to 38% at the end of CY2024, while Safari Industries saw market share grow from 25% to 32% in the same time. Samsonite’s market share rose from 28% to 30%, data sourced from the industry showed.
The challenges of growing in a competitive market has reflected in the financial performance of VIP Industries, with FY25 revenue down 3% to Rs 2,178 crore versus the previous year, even as volumes increased 11%. The company slipped into the red in FY25 versus a net profit of Rs 54 crore in FY24.
Neetu Kashiramka, MD of VIP Industries, told investors post its FY25 earnings in May that heavy discounting initiated by online brands and e-commerce platforms had put pressure on price realisation of the company.
“High heat competition has fueled a price war in our segment, especially in the mid-price segment. Our commitment to reduce slow moving inventory further added pressure on our average selling price. While our value growth has been flat after removing the price support, volume continues to grow in double-digits,” she said of the company’s performance.
Kashiramka said that the company is looking to balance its premium portfolio with new offerings. The company is also committed to premuimisation across its categories, she added.