Footwear firm RedTape shares settle 10% higher as report says founders eye stake sale, tap Blackstone, KKR

RedTape shares rise in trade.

• RedTape shares surged nearly 16 percent after founders explored stake sale
• Promoters appointed EY to advise on divestment, approached Blackstone and KKR
• RedTape may sell majority or entire stake valued at around USD 510 million

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Shares of footwear maker RedTape on Monday surged nearly 16 percent after a report said the company’s founders are exploring a sale of their stake and have reached out to private equity firms.

On the NSE, RedTape stock climbed 15.95 percent to an intraday high of Rs 134.80 a share. The gain came after the stock had fallen for three straight sessions. The stock settled at Rs 128.26 per share, up 10.33 percent.

The rise followed a Reuters report that RedTape is seeking proposals from private equity firms Blackstone and KKR, as its founding family looks to sell a majority stake or even its entire holding valued at around USD 510 million.

The report said RedTape’s promoters, the Mirza family, have appointed consultancy firm Ernst & Young as the exclusive financial adviser for the divestment of their stake, according to a document dated December that was seen by Reuters.

EY has approached firms such as Blackstone and KKR & Co to gauge interest in a possible transaction, the report said, citing people familiar with the matter.

Launched in 1996, RedTape operates in the footwear and apparel segment and competes with players such as Nike, Adidas, Bata India and Campus Activewear.

The footwear and apparel market is projected to grow at about 11 percent annually to USD 21 billion by 2028, according to estimates by market research firm 1Lattice.

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