Spykar promoters in talks with private equity firm IVFA to sell 15 per cent stake

NEW DELHI: The promoters of denimwear brand Spykar Lifestyles are in advanced talks with private equity company India Value Fund Advisors (IVFA) to offload a portion of their stake in the Mumbai-based company.

Founder-promoters Prasad and Harshada Pabrekar, who currently hold about 40% stake in the company, are in talks to divest 15% to IVFA, which manages assets to the tune of $1.2 billion (about Rs 7,200 crore), according to sources with direct knowledge of the discussions.

The deal, which is expected to be finalised over the next month, could see the Pabrekars get about Rs 70 crore at current valuations.

If successful, the secondary transaction could see IVFA grab a 75% stake in one of India’s largest domestic denim companies, as the India-focused private equity fund is also in talks with Avigo Capital , to buy the latter’s 60% ownership in Spykar.

Vishal Nevatia , managing partner of IVFA , did not reply to email queries while S Harikrishnan , managing director at Avigo Capital, denied the developments in an emailed response.

The payout is expected to be a structured one based on cash payouts, and certain milestones to be achieved by the company over the next two to three years.

Founded in 1992, privatelyheld Spykar Lifestyles retails across 260 cities, from over 200 exclusive brand outlets as well as over 1,000 multi-brand stores.

The company competes with bigger global brands such as Levis, Wrangler and Pepe. Avigo Capital, which invested in Spykar Lifestyles across multiple rounds, has been on the lookout for an exit from the company for the past 18 months.

In 2012, Avigo Capital had co-invested Rs 30 crore in Spykar along with its global limited partner, Metmin Investments , and had acquired a 30% stake in the process. The transaction was preceded by Avigo’s 2007 investment in Spykar, where they paid Rs 25 crore for a similar 30% stake.