Cult.fit has revealed a major change in its long-running collaboration with Hrithik Roshan’s activewear brand HRX ahead of its planned initial public offering (IPO). According to the company’s draft red herring prospectus (DRHP) filed with the Securities and Exchange Board of India (SEBI), Cult.fit has terminated its exclusive agreement with Extreme Brands LLP, the company that holds the rights to the HRX brand.
Hrithik Roshan exits Cult.Fit brand partnership ahead of HRX IPO; Actors will remain investors
Exclusive HRX agreement has expired
Cult.fit entered into an agreement with Extreme Brands LLP on August 11, 2023, to acquire perpetual and exclusive rights to the HRX brand. Although the company did not disclose the annual consideration for the arrangement, the agreement reportedly had a contingent liability of around Rs 30 crore.
However, the latest DRHP confirms that the agreement has now been terminated. The filing did not disclose the reasons behind the decision or whether the move will have any impact on Cult.Fit’s branding strategy going forward.
Hrithik Roshan will sell some part of his stake through OFS
The DRHP also reveals that Hrithik Roshan will participate in the offer for sale by selling 6.33 lakh equity shares. Despite the partial disinvestment, the actor will remain an investor in the company even after the IPO.
Hrithik first invested in Cult.fit in May 2018 when he came on board as the company’s brand ambassador. He reportedly invested around Rs 3.75 crore and the value of that stake has increased significantly over the years. Based on the latest valuation of Cult.fit, the value of the investment is estimated to be around Rs 25 crore.
Along with the actor, his sister concern, Extreme Brands LLP also invested around Rs 2.25 crore in the company.
The development comes as the Bengaluru-based fitness and wellness company is preparing to go public with a proposed fresh issue of shares worth Rs 950 crore along with an offer for sale (OFS) by several existing shareholders.
