Myntra Jabong secures a loan of Rs 199 crores

Myntra Jabong India the business-to-business fashion retail arm of Flipkart-owned online fashion retailer Myntra, has secured a loan of Rs 199 crore from Yes Bank. The company secured the loan in July through a hypothecation agreement, or by pledging its assets as collateral, according to a filing with the Ministry of Corporate Affairs.

The amount is part of a total credit facility of Rs 300 crore extended to Myntra group entities by Yes Bank, reveal MCA documents. Myntra Jabong India is likely to use the money to meet its working capital requirements.

Myntra joins parent Flipkart in taking on bank debt. Myntra Jabong India and Myntra designs, which owns the trademark Myntra, and Jade Eservices which owns Jabong, are subsidiaries of FK-Myntra Holdings. Singapore-based FK-Myntra, in turn, is owned by Flipkart. Myntra CEO Ananth Narayanan had recently stated that private labels are expected to contribute 30 per cent of the company's revenue by the end of this year. It had also opened an exclusive offline store for Roadster. Roadster had achieved a run rate of Rs 500 crore in 2016 and is expected to touch Rs 1,000 crore by 2018-19.

Flipkart has been ramping up its private label play. It launched its own private label, Divastri, for women and Metronaut for men in June and July, respectively. The fashion category has been crucial for Flipkart to maintain its lead, with Amazon breathing down its neck. After acquisition, Flipkart holds a 70 per cent market share in Jabong, the online fashion segment.