Arvind Beauty Brands to be acquired by Reliance Retail subsidiary; Arvind Fashions share jumps 11%

Shares of Arvind Fashion jumped 11.4 percent as the fashion player entered into a share purchase agreement with Reliance Beauty & Personal Care, who will acquire Arvind Beauty Brands.

Arvind Fashions will sell and transfer the entire equity stake in Arvind Beauty Brands to Reliance Beauty & Personal Care, a wholly owned subsidiary of Reliance Retail Ventures, for a purchase consideration of Rs 99.02 crore.

As of 1.25 p.m., shares of Arvind Fashions were trading at Rs 348.9 apiece on the NSE, higher by 7.35 percent from the closing price of the previous session.

However, the transaction was completed at an enterprise value of Rs 216 crore which would go towards the sale of the entire equity stake as well as repayment of outstanding loans.

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On a consolidated basis, the turnover of Arvind Beauty Brands in the previous fiscal year was Rs 336.7 crore. This accounted for 7.60 percent of the consolidated revenue of Arvind Fashions.

The net worth of Arvind Beauty Brands Rs 10.6 crore in the last fiscal, which accounted for one percent of the consolidated net worth of the parent.

Shareholding pattern, stock price movement

Over the past six months, shares of Arvind Fashions have risen 23.05 percent while the blue-chip index Nifty 50 has given investors returns of 6.46 percent. The company has a market capitalisation of Rs 4,634.2 crore.

The promoter holding was primarily unchanged for the quarter ended September at 36.8 percent. FIIs increased their holdings to 16.6 percent, while DIIs held 8 percent of the company’s shares during the quarter. The public owned 38.6 percent shares in the firm.

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