TVS Shriram Growth Fund-I is set to pick up a significant minority equity stake in Landmark, a leading book and music retail chain. The Fund is planning to invest in all Rs. 65 crore. A subsidiary of Trent, a Tata Group outfit, Landmark at present operates over 20 stores, many of which are large format stores, across leading cities with over two lakh-square feet of retail space.
In a notification to the Bombay Stock Exchange, Trent said that it had initialled definitive agreements on Wednesday for the sale of 14.03 lakh equity shares of Rs. 10 each held by the company in its unlisted subsidiary Landmark to TVS Shriram Growth Fund-I for Rs. 50 crore. The agreement also provided for a subscription by the Fund of a further 4.21 lakh equity shares in Landmark for Rs. 15 crore, it said.
According to Suresh Raju, Executive Director, TVS Capital Funds, the Rs. 65-crore fund infusion would fetch the Fund an equity stake of close to 25 per cent in Landmark eventually.
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This values Landmark at Rs. 260 crore. No doubt the money from the part-stake sale would go to Trent. According to highly-placed sources, however, Trent has decided to reinvest the money from the part-stake sale into Landmark. “After all, Trent is looking for growth capital for Landmark,” these sources said.
TVS Shriram Growth Fund-I is a Rs. 600-crore domestic rupee fund. It is established with a vision to develop and nurture mid-cap Indian businesses into world-class companies. The fund is managed by TVS Capital Funds Ltd., the investment manager. The TVS Group and Shriram Group are the sponsors of the fund.
The Fund has set its eyes on consumer consumption-driven opportunities such as retail businesses. Landmark is the first investment of the Fund in the retail segment. “Landmark is a marquee investment for us. We are excited to enable the next wave of growth at one of the leading specialty retailers in India,” said Gopal Srinivasan, founder and Chairman of TVS Capital Funds. Mr. Gopal Srinivasan will join the board of Landmark as the nominee of the Fund. The Fund, he said, would be a strategic co-investor in Landmark.
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“We are excited about the equity investment into Landmark, and look forward to partnering TVS Shriram Growth Fund in our journey to scale up Landmark’s retail business,” a release quoted Noel N. Tata, Managing Director of Trent and Chairman of Landmark, as saying.
For the year ended March 2009, Landmark had gross revenues of Rs. 196 crore.