Private Equity Titans Compete for Majority Stake in RedTape
In a significant development in India's corporate landscape, global private equity heavyweights Apax Funds and Advent International have emerged as frontrunners in the race to acquire a controlling stake in RedTape, the prominent Indian footwear manufacturer. The potential transaction could value the Noida-based company at an impressive ₹4,500 crore to ₹5,000 crore (approximately $500 million), according to sources familiar with the ongoing discussions.
Early-Stage Negotiations and Promoter Exit Plans
The talks are currently in their preliminary phases, with the promoters of RedTape having engaged EY as their financial advisor to oversee the process. The consultancy firm has reportedly solicited non-binding bids from interested parties. The promoters, who collectively hold 71.79% of the company's shares as per the December shareholding pattern disclosed on the National Stock Exchange (NSE), are considering divesting either their entire stake or a substantial portion of their holdings.
"Warburg Pincus may also join the fray and compete for the majority stake," revealed one of the sources, indicating that the competition for this asset could intensify further. This development follows earlier reports this month that other global investment firms like KKR and Blackstone had expressed preliminary interest in acquiring the stake.
Market Reaction and Financial Performance
RedTape's shares experienced a notable surge of 4.05% on Friday, closing at ₹123.83 on the NSE, even as the benchmark Nifty 50 index declined by 0.39%. However, over the past year, the company's stock has witnessed a decline of 29.57%, with its market capitalization standing at ₹6,845.42 crore as of the latest trading session.
The company's financial performance shows a mixed picture. While its revenue increased to ₹2,052.93 crore in FY25 from ₹1,855.97 crore in the previous fiscal year, its profit narrowed slightly to ₹170 crore from ₹176.24 crore, as per its annual report. "The business is dependent on heavy discounting, and the margins have been thinning over the years," commented a senior private equity executive on condition of anonymity.
India's Booming Footwear Market Attracts Investors
This potential acquisition comes against the backdrop of surging investor interest in India's rapidly expanding footwear sector. According to a report by the IMARC Group, India's footwear market, valued at $20.67 billion in 2025, is projected to more than double to reach $47.53 billion over the next eight years. This growth trajectory presents substantial opportunities for both domestic and international investors.
"Though the total addressable market is huge and the growth potential seems steady, given the large demography of our country, it makes more sense for global funds looking to take the brand to markets outside India," added the private equity executive. The deal represents one of the largest private equity transactions in India's branded footwear space, signaling confidence in the sector's long-term prospects.
RedTape's Established Presence and Competitive Landscape
Founded in 1996 by Rashid Ahmed Mirza and Shuja Mirza, RedTape has grown into a formidable player in the footwear industry. The company operates an extensive network of over 600 stores across India, offering footwear and clothing for men, women, and children. Its international footprint spans 17 countries, including the UK, US, Australia, and the UAE, through its four distinct brands: RedTape, Mode, Ozark, and Bond Street.
In the competitive Indian market, RedTape faces established rivals such as Bata India, Metro Brands, Relaxo Footwears, and Campus Activewear, alongside global giants like Nike and Adidas. The company's ability to maintain its market position while expanding its global reach will be crucial for its future growth.
Broader Trend of Family-Owned Businesses Seeking External Capital
The RedTape deal aligns with a broader trend where family-owned businesses in India are increasingly turning to external capital to fuel expansion, professionalize operations, and scale up their enterprises. Over the past year, several prominent family-run companies, including Haldiram, Iscon Balaji, Balaji Wafers, Theobroma, and VIP Industries, have explored similar strategic moves. Others like HyFun Foods and Ratnadeep Retail are reportedly in various stages of their fundraising processes.
This trend underscores the evolving dynamics of India's corporate sector, where traditional family-owned enterprises are embracing private equity and institutional investments to accelerate growth and enhance competitiveness in an increasingly globalized market.
Recent Fundraising Activity in the Footwear Sector
The interest in RedTape is part of a wave of investment activity in India's footwear industry. Earlier this month, sustainable footwear brand Neeman's raised ₹35 crore from SNAM Solutions and existing investors including Anicut Capital, Enam Investments, and Harsh Mariwala-backed Sharrp Ventures. In October 2025, RARA Barefoot, a direct-to-consumer footwear startup co-founded by cricket legend Sachin Tendulkar, secured $500,000 in funding from Peak XV Partners.
Additionally, Mint reported in July 2024 that Aqualite Industries was exploring a private transaction to facilitate an exit for its investor, Lighthouse Funds. These developments collectively highlight the vibrant investment landscape in India's footwear and consumer goods sectors, driven by favorable demographic trends and rising disposable incomes.
As the negotiations progress, the outcome of this potential deal will be closely watched by industry observers, investors, and competitors alike, as it could set new benchmarks for valuations and investment strategies in India's consumer-facing industries.
