Carlyle grabs stake in Fabindia

Global private equity major Carlyle has grabbed an equity investment in ethnic wear chain Fabindia.

The latter would utilise the funds generated through stake sale to expand its network of small-format stores in Tier II, III cities. The deal values the company at Rs 1,400 crores. The buzz is that Carlyle outbid top private equity firms like Bain Capital, Everstone Capital, KKR, New Silk Route, Premji Invest, Sequoia and Temasek, who were eying a stake. Fabindia is known for sourcing products from villages and helping in providing rural employment in India. PE investors are usually interested in a stake in such companies having strong business network in smaller towns.

Fabindia links over 40,000 craft-based rural producers to modern urban markets. The company wanted to raise Rs 200 crores by selling stake to PE investors, while the investors were also vying the eight per cent stake held by PE fund Wolfensohn Capital Partners, promoted by former World Bank chief James Wolfensohn, which invested Rs 50 crores in Fabindia four years ago. Founded 50 years ago by American John Bissell, Fabindia is now run by his son William Bissell. The Bissell family owns 50 per cent in Fabindia, while Wolfensohn Capital holds eight per cent and the employees own the balance 42 per cent stake.