Spencer’s eyes Avigo’s stake in Spykar

Spykar Lifestyle seems to be up for grabs and Spencer’s

Retail, the flagship company of RP-Sanjiv Goenka Group has joined the race to acquire the biggest domestic denim maker. Spencer’s is said to be in early stages of discussions with Avigo Capital, a private equity (PE) major that holds 60 per cent stake in Spykar.

The PE fund manager has begun talks with various investment bankers for giving a sell mandate. Avigo is looking for an enterprise value of Rs 350-400 crores for Spykar. Last year, Avigo had taken over the reins from promoters after roping in its global investor, Metmin Investments, to acquire 30 per cent stake in Spykar by pumping in Rs 30 crores. Metmin Investments is owned by NRI tycoon Raj Bagri, who was the chairman of London Metal Exchange. In 2007, Avigo had invested about Rs 25 crores in Spykar.

Spykar, a known name in denim and casual wear space was established by Prasad Pabrekar in 1992. Currently, Pabrekar holds 40 per cent stake in the company. Spykar makes casual wear and accessories for men and women. Spykar products are sold through 1,000 multi-brand outlets and 198 exclusive brand outlets across the country.

Sources say apart from the RP-Sanjiv Goenka group, Aditya Birla Group is also in discussions for acquiring a stake to expand its retail brand portfolio. Apart from these two, two PE funds, Everstone Capital and India Value Fund Advisors, have also shown interest in Avigo’s stake.

Last week, the Rs 9,000-crores RP-Sanjiv Goenka Group announced plans to list Spencer’s Retail, after demerging it from CESC. The group has plans to induct a strategic investor in the company. Spencer’s had a turnover of Rs 714 crores in the first six months of this financial year, compared to Rs 560 crores in the same period last year. It currently runs about 200 stores; including 30 large format ones, across 40 cities.