Reddy family likely to exit Maxwell

The Reddy family, one of the two promoters of the city-based textiles firm Maxwell Industries, may sell its entire 32 per cent stake.

A source close to the development said the Reddys were in talks with the Kishore Biyani-promoted Future Group's private equity arm, Indivision, and a high networth investor for the sale.

They added that the broad contours of the arrangements suggest that Indivision would pick up 27 per cent, while the high networth investor would acquire 5 per cent stake. The deal would be announced within a week.

The deal is expected to fetch nearly Rs 100 crore (Rs 1 billion) to the Reddy family, who jointly with the Pathare family launched Maxwell Industries 16 years ago.

The Pathare family controls 32 per cent stake. The deal is likely to be priced at Rs 43-45 a share, lower than the current market price of Rs 51. However, the price is higher than what the Reliance-Anil Ambani Dhirubhi Ambani Group paid a year ago.

Indivision, post-acquisition of the 27 per cent stake, would come out with the mandatory 20 per cent open offer to retail shareholders of the company.

The Ambani group's investment arm, Reliance Capital Partners, acquired 14.55 per cent stake in Maxwell in May last year for Rs 31.65 a share.

Kapil J Pathare, director of Maxwell, declined to comment on the issue. Repeated attempts to contact L Vinay Reddy, director, failed.

The company is also in talks with a couple of European lingerie brands for a joint venture in India. The country's branded innerwear market is pegged at around Rs 750 crore (Rs 7.50 billion).

Maxwell, the maker of VIP and Loveable brands of innerwear, is in the process of merging Lovable Lingerie and Microtex India with itself, following which the size of the company is likely to go above Rs 300 crore (Rs 3 billion). Other Maxwell brands include Daisy Dee and Vanity Fair.

The company also plans to open 120 exclusive boutiques mainly in the metros and tier I cities.