Too much baggage: VIP Industries promoters to cut stake at discount; shares dip on news of deal

Promoters of one of India’s oldest and leading luggage makers VIP are cutting their stake in the company. The promoters will be selling around 32 per cent stake in the company to a clutch of investors, including Multiples Private Equity, Samvibhag Securities, Mithun Sacheti (the founder of jewellery retail chain CaratLane) and his brother Siddhartha Sacheti.

Established in 1968, VIP has been among the world’s leading manufacturers and retailers of luggage, backpacks and handbags. The brands the company sells include VIP, Skybags, Caprese, Alfa and Aristocrat.

 

The deal structure

Entities forming the promoter group—DGP Securities, Kemp and Company, Piramal Vibhuti Investments, Alcon Finance and Investment, DGP Enterprises, Kiddy Plast and Dilip Piramal—will sell around 32 per cent of the total paid-up share capital of the company to Multiples PE and other investors mentioned earlier.

The promoters didn’t disclose the price at which they were selling the stake. The promoters held a 51.73 per cent stake in VIP Industries in the January-March 2025 quarter.

While Renuka Ramnath-led Multiples PE will acquire management and control of VIP Industries, Dilip Piramal will continue to remain a shareholder and stay on as chairman emeritus of the company. 

On and from the effective date of the share purchase agreement, the purchasers will be able to nominate the majority of directors to the board. The purchasers will need to make an open offer for the purchase of an additional 26 per cent stake in the company.

Multiples PE aims to acquire up to 3.70 crore equity shares from VIP’s public shareholders for over ₹1,437 crore, which amounts to ₹388 a share. This is a nearly 15 per cent discount to VIP’s closing price of ₹456.40 on the BSE on Friday. Not surprisingly, the stock was trading about 4.50 per cent lower at ₹436.10 on Monday morning.

 

India’s luggage market

India’s luggage industry has seen steady growth over the past few years, with Indians travelling more post the COVID19 pandemic and corporate travel also picking up.

According to Statista, the revenue in the luggage and bags market in India is estimated to be around $16.12 billion in 2025 and is expected to compound annually at around 7.66 per cent between 2025 and 2030.

However, several startups, including Mokobara, Uppercase, Assembly, and Nasher Miles, have been aggressively looking to disrupt the market over the last few years. Meanwhile, established homegrown and multinational brands like Safari, Samsonite, and American Tourister are also seeking growth. The intense competition has led to a price war in the industry, hurting revenues even as demand is rising.

 

Revenue pressures

VIP’s revenue in the year ended March 2025 was down 3 per cent to ₹2,178 crore, even as volumes were up 11 per cent.

Neetu Kashiramka, the MD of VIP, told investors post its earnings that the luggage industry has been one of the most attractive sectors post-COVID with high growth rates, positive travel macros, and low entry barriers, which have attracted multiple new entrants, backed by large investor funding.

“High heat competition has fueled a price war in our segment, especially in the mid-price segment. Heavy discounting initiated by online brands and e-commerce platforms has also put some pressure on realisation, not only for us, but across the industry,” she had said.

Ramnath of Multiples said on Monday that the private equity firm was excited to lead the ownership transition of the “very strong” legacy business of VIP and further build on its rich heritage and unlock its next phase of growth.

Piramal said the deal “marks an important step toward reviving the company’s strong legacy and helping it regain its foothold in the Indian luggage market, where it has struggled in recent years.” 

Broking firm PL Capital had in May cut its earnings per share estimates for VIP Industries by 48.3 per cent for the 2025-2026 financial year, citing the ongoing price war. The new owners will then have the task cut out.

 

Business