Pantaloon eyes Draper's 11% in Indus League

Pantaloon Industries Ltd, which already owns 67 per cent stake in apparel company Indus League, is seeking to acquire 11 per cent more held by Draper India International.

Pantaloon has offered to issue Draper India International 19,39,790 Cumulative Redeemable Preference Shares (with 1 per cent coupon rate) of Rs 20 each in exchange for its 11 per cent stake in Indus League.

Last year, Pantaloon acquired ICICI Venture Fund's 67 per cent stake in the clothing company which owns brands such as Indigo Nation, Scullers, Ironwood and Jealous.

Sources said that the company's proposal was supported by the Department of Economic Affairs' Foreign Investment Unit, subject to Indus League not undertaking retail trading, and also Securities and Exchange Board's SAST Regulations, 1997.

However, with the company supplying fabrics to Pantaloon Retail and other readymade garment manufacturers, its involvement in retail trading became a bone of contention, leading to the FIPB seeking a clarification from the company about its activities relating to retail trading.

Indus League Clothing Ltd was started in 1999 by eight professionals from the garment industry led by Sriram Srinivasan, the former president of Madura Garments.

It got its initial infusion of capital investment from Draper India International, the Indian subsidiary of leading venture capital firm Draper International, ICICI Ventures and Dalmia Cements.

Last year, it launched Urban Yoga, its new brand of yoga wear, yoga mats and bags and is planning more brand launches across apparel categories.