ADM to pick up 10% in S Kumars, Brandhouse

MUMBAI: Hong Kong-based private equity firm ADM Capital is investing $107 million into S Kumars Nationwide Ltd and its retail arm Brandhouse Retail.

ADM will invest $82 million to acquire a 10% stake in the S Kumars Nationwide and $25 million will be invested in Brandhouse Retail for another 10% stake in the company.

S Kumars Nationwide (SKNL), the Mumbai-based Rs 1,000-crore textiles and apparel conglomerate along with its retail arm Brandhouse Retail has tied up private equity investment of $107 million from ADM.

Nitin Kasliwal, managing director and vice chairman, S Kumars Nationwide (SKNL) told DNA Money, “We will issue convertible warrants to ADM Capital.”

The deal values the S Kumars share at Rs 82.5, while the Brandhouse Retail share has been valued at Rs 85, Kasliwal said. S Kumars will utilise $30 million to repay lenders, while $52 million will be used to fund capital expenditure plans.

Analysts have estimated that the textiles market in India will boom for the next 15 years, drawing in investors big-time.

Gautam Sinha Roy of Edelweiss Capital, in a recent note to clients, said while China has been the biggest beneficiary of the global consolidation in production because of its low cost and efficiencies of scale, India has been among the most favored sourcing destinations for global retailers because of its demonstrated strengths in cotton wovens, high design content, and short-run manufacturing.

S Kumars operates in the worsted, ready-to-wear, consumer textiles, home textiles segments.

Brandhouse Retail, which was demerged from S Kumars, will utilise the entire $25 million to fuel growth plans. It is also expected to be listed on the exchanges as a separate entity by August.

Brandhouse will invest Rs 400 crore to open 1,000 stores across the country over the next three years.

It owns and operates S Kumar's apparel and textile showrooms and manages international brands such as Dunhill, Escada and Stephens Brothers.