FabIndia, the kurta outfit, is worth $183 million?
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Ex-World Bank president buys Fabindia stake
By Joe Leahy in Mumbai
Published: July 9 2007 19:39 | Last updated: July 9 2007 19:39
James Wolfensohn, the former World Bank president, has joined the
rush by private equity firms to invest in India by buying a stake in
a chic domestic garment retailer that specialises in ethnic Indian
designs and fabrics.
Mr Wolfensohn’s company, WCP Mauritius Holdings, will pay $11m for a
6 per cent stake in Fabindia, one of the first Indian companies with
foreign investment to sell modern consumer goods sourced from India’s
village-level artisans.
“The money will be used for expansion and for our growth plans,”
Fabindia said yesterday.
The investment by Mr Wolfensohn comes as a growing number of private
equity firms have been scouring India for deals.
In the first half of the year, for the Asia-Pacific region excluding
Japan, India for the first time was ranked second in terms of the
value of announced private equity transactions, with a record $2.33bn
of deals, up 55 per cent on a year earlier, according to figures from
Thomson Financial.
Since leaving the World Bank in 2005, Mr Wolfensohn has established
Wolfensohn & Company, a private investment firm, and is setting up an
investment banking group with his children and associates.
This year, he went to the Gulf to court Arab investors for a $500m
private equity fund with a focus on alternative energy.
Fabindia was set up in 1960 by John Bissell, a former buyer for
Macy’s New York, initially to export Indian handloom textiles adapted
to western tastes.
Today it has 61 stores selling men’s and women’s garments, as well as
household furnishings, pottery, organic food and handicrafts.
It plans to use the Wolfensohn investment to expand the number of its
stores to 200 in four years and it says it will hand over the supply
chain to companies set up in co-operation with the communities that
make its goods.
Private equity firms have been active in India for some time but
until recently transactions were small.
In the past year, however, there have been signs of increased
interest, with Carlyle recently clinching a $650m deal for a 5.6 per
cent stake in the country’s second-largest private lender, HDFC.
