Stock Falls 8% After Clarification on Blackstone, KKR, and Others Buying Stake

Synopsis:  Redtape plunged sharply after the company denied rumours of it selling a stake to PE giants like Blackstone, KKR co, etc. Though it stated that it constantly seeks strategic opportunities for growth and value.

The shares of this company, engaged in the trading of Footwear and Clothing for Men, Women and Kids are in focus after it made a key clarification that erupted from earlier stake sale reports by its founders. In this article, we will dive more into the details of it.

With a market capitalisation of Rs 6,667 crore, the shares of Redtape Ltd reached a day’s low of Rs 119.85 per share, down 8 percent from its previous day’s closing price of Rs 129.95 per share. In the last one year, the stock has corrected by over 34 percent, as compared to NIFTY 50’s positive return of 11 percent.

Reason behind the plunge

Footwear and apparel brand RedTape plunged sharply in today’s trade after it denied the reports of  its founders selling their stakes to potential investors like KKR, Blackstone, etc

In a formal response to BSE, Redtape Limited mentioned that the company, along with its promoters, constantly looks for strategic opportunities for growth and value creation with different stakeholder groups. 

However, the company has made it clear that, so far, no single event has taken place which would require disclosure under Regulation 30 of SEBI (LODR), 2015. Besides, RedTape said that it does not know any undisclosed information that could be a reason for the recent stock price movement. 

Earlier, a report by Reuters disclosed that the footwear and apparel brand RedTape was in talks with private equity majors Blackstone and KKR & Co about investment opportunities, while the founding Mirza family is considering divesting a controlling stake or possibly the entire shareholding, which together is worth close to $510 million (Rs 4,590 crore).

The report also stated that the Mirza family had engaged Ernst & Young (EY) as the sole financial advisor for the sale process, and EY has already reached out to Blackstone and KKR to check their level of interest. Though it added that the deal of the stake sale is still in its very initial stages, the company is at present inviting non-binding indicative bids, and the sources speaking on the condition of anonymity due to the confidential nature of the discussions.

Financials

The revenue from operations for Redtape stands at Rs 492 crores in Q2 FY26 compared to Q2 FY25 revenue of Rs 416 crores, up by 18 per cent YoY. Additionally, on a QoQ basis, it reported a growth of 6 percent from Rs 464 crore. 

Coming down to its profitability, the company’s net profit stood at Rs 28 crore in Q2 FY26, up from Rs 25 crore in Q2 FY25, which is a growth of 12 percent YoY. However, on a QoQ basis, it reported a net profit of Rs 39 crore, which is a decline of 28 percent.

RedTape is recognised as a leading brand for footwear and clothing for men, women, and children. They follow the “Company Owned and Company Operated” (COCO) model, ensuring everything remains under their control. Over the years, RedTape has become a preferred destination for families seeking international styles and reliable quality, whether it’s shoes, apparel, or accessories, for all ages.

Redtape Limited operates 623 stores across 20 states and 3 Union Territories in India. By Q2 FY26, they have 303 exclusive mega showrooms online, 186 more offline, 6 sports outlets, 9 factory shops, and 119 shop-in-shop locations. Their retail network isn’t just large, it’s widespread.

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