Koovs rallies as India's largest retail group subscribes for a stake

Shares in Koovs rallied on Wednesday after the Indian fast fashion retailer said that Future Lifestyle Fashions - which is part of India's biggest retail group, Future - has agreed to subscribe for a stake of up to 29.9% in the company.

Future Group owns more than 60 brands, operates close to 2,000 retail stores and attracts footfall of more than 500m annually. It also has one of India's most unique digital payment platforms, Future Pay, which has an active user base of over 6.5m.

Future Lifestyle Fashions owns and markets 30 fashion brands through exclusive brand outlets, department stores and multi brand outlets, as well as company-operated chains such as Central and Brand Factory.

Koovs chairman Lord Alli said: "This marks a giant step forward in the Koovs' journey to win the e-fashion market in India. FLFL with its leadership position as an integrated branded fashion player and the Koovs brand and technology platform are an unbeatable combination. This investment will bring enormous benefits to our customers and partners as well as significant value for all shareholders."

Koovs will issue FLFL with just under 58m new ordinary shares at 10p each, representing 24.8% of the enlarged issued share capital and raising £5.8m in cash.

The company also announced the formal opening of a bookbuild to raise as much as £10m of equity at 15p per share.

Hardman & Co said: "With the capital and the partners, Koovs now has the substantial platform on which to build India's leading fashion e-tailer and has financially de-risked the whole venture."

At 1430 BST, the shares were up 23% to 22.50p.