Cult.fit Terminates HRX Brand Partnership Ahead of IPO; Hrithik Roshan to Sell Shares
Fitness and wellness company Cult.fit has ended its exclusive brand agreement with Hrithik Roshan's activewear brand HRX, a change disclosed in its Draft Red Herring Prospectus (DRHP) filed with the Securities and Exchange Board of India (SEBI). This development precedes Cult.fit's planned initial public offering (IPO). Actor Hrithik Roshan is also set to participate in the Offer for Sale (OFS) by divesting 6.33 lakh equity shares, although he will continue to remain an investor in the company after the IPO.
Cult.fit has terminated its exclusive agreement with Extreme Brands LLP, the entity that owns the rights to the HRX brand. This significant change in the long-standing association was revealed in the company's Draft Red Herring Prospectus (DRHP) filed with SEBI, ahead of its anticipated initial public offering (IPO).
The original agreement, signed on August 11, 2023, granted Cult.fit perpetual and exclusive rights to the HRX brand. While the annual consideration for this arrangement was not disclosed, it reportedly carried a contingent liability of nearly Rs 30 crores. The latest DRHP confirms the termination of this agreement, though the filing does not specify the reasons behind the decision or its potential impact on Cult.fit's future branding strategy.
In addition to the partnership change, Hrithik Roshan is slated to sell 6.33 lakh equity shares as part of the Offer for Sale (OFS) component of Cult.fit's IPO. Despite this partial divestment, the actor will maintain his investment in the company post-IPO.
Roshan initially invested in Cult.fit in May 2018 when he became its brand ambassador, reportedly investing approximately Rs 3.75 crores. This investment is now estimated to be worth around Rs 25 crores, based on Cult.fit's latest valuation. His affiliated entity, Extreme Brands LLP, also invested an additional Rs 2.25 crores in the company.
This development occurs as the Bengaluru-based fitness and wellness company prepares to go public, proposing a fresh issue of shares worth Rs 950 crores, alongside an Offer for Sale by several existing shareholders.
(Source: Bollywood Hungama)
