Home >> Private Equity >>

Footwear retailer Khadim’s looking to raise $18M in funding

The firm also initiated plans to come up with an IPO but had to cancel it as stock markets tanked in 2008.

Kolkata-based footwear manufacturer and retailer Khadim India Ltd, which runs its operations under the brand Khadim’s, is in initial talks with private equity players for a deal worth Rs 100 crore ($18 million). The deal includes a small secondary component, but the bulk of the money will come in as fresh infusion, a source privy to the development told VCCircle.

According to the source, the firm is eyeing fresh cash infusion of around Rs 88 crore, which will be used for expanding its operations. Sources also add that the company has hired Tata Capital as a banker to scout for private equity partners. However, a spokesperson of Tata Capital declined to comment on the same.

Another source familiar with the matter added that Multiples PE, a Mumbai-based private equity firm, is in early talks with Khadim’s for a potential investment.

Separate e-mail queries sent to Khadim’s chief Siddhartha Roy Burman and Multiples PE chief Renuka Ramnath for comments on the deal did not elicit any response till the time of publishing this article.

Khadim’s is the dominant Indian player in the value segment of footwear business and is especially strong in eastern India. The group entered the footwear business after acquiring a Kolkata-based firm five decades ago. It both manufacturers its own footwear and also sources from others for its retail venture.

The firm claims a footprint of more than 600 retail outlets across the country, many of which are run by the company itself. Its key presence is in eastern and southern India, but the firm has been trying to make its mark in northern and western India as well. The company has also forayed into other retail formats including a super store chain called Khadim’s Khazana and jewellery retailing through Khadim’s Egaro.

The privately held profitable firm has annual revenues of over Rs 400 crore.

Two other listed peer group firms are Bata and Sreeleathers. Bata, the market leader, is over four times the size in revenues with a market cap close to $1 billion. Sreeleathers, which is another value footwear retailer, is much smaller in size and commands a market cap of around $125 million. Both these firms have higher profit margins compared to Khadim’s.

Interestingly, Khadim’s had planned to go public in 2008. As per its original plan, the issue was expected to hit the market in the second half of the year, but the stock market crash swept away the proposed issue.

Earlier, it had also raised private funding from Adharshila Venture Capital Fund, which is managed by Microsec Capital. Microsec was the book manager for the proposed public issue, which didn’t materialise. The firm also saw ad-for-equity investor Bennett Coleman & Co Ltd come in as a shareholder. But both these external investors exited in the past, sources told VCCircle.

Among other deals in the footwear industry, Future Ventures recently acquired 33 per cent stake in KFC Shoemaker for an undisclosed sum. Future Ventures also has a previous JV with UK’s C&J Clark International, called Clark Future Shoes.

According to a 2012 report by PwC, the Indian footwear market is estimated to be worth $3.94 billion and is expected to grow to $6.89 billion by 2015.

(Edited by Sanghamitra Mandal)

Khadim India Ltd. (formerly Khadim Chain Stores Ltd.) operates as a footwear retailer in India. It offers footwear for men, women and children. The firm also offers accessories including bags, belts, wallets, socks, mobile cover, polish and brush, bristles and mobile pouch. Khadim India Ltd. was founded in 1965 and is based in Kolkata, West Bengal.


Upcoming Events