Mumbai-based Kimaya Fashions Pvt Ltd, a luxury fashion house focusing on ethnic women’s wear, has stated that it has received a commitment of Rs 60 crore from Franklin Templeton Private Equity Strategy.

This will be the third transaction for the Rs 630 crore private equity portfolio (advised by Darby Asia Investors (India) Pvt Ltd) in as many months. The fund has also invested Rs 67.5 crore in SFO Technologies Pvt Ltd in May this year and funded Chennai-based publishing services provider Newgen Knowledge Works in July.

Kimaya, founded in 2002, is promoted by Pradeep Hirani and Neha Hirani. The company operates high-end designer stores and currently manages more than 35,000 sq. ft. of premium retail space in India and Dubai. The company now plans to expand into tier II cities.

The funds will also be used for expanding Kimaya’s presence and establishing a new brand in the affordable luxury space that will target the upper middle class in India. It is also launching an e-commerce site to tap the global market for its products. o3 Capital was the financial advisor on the transaction.

Although the luxury product market in India is in a nascent state, it has grown significantly at a CAGR of 22 per cent over 2007-2009, in spite of the global economic downturn. According to A.T. Kearney, the luxury products market in India is likely to register growth at a CAGR of 23 per cent through to 2015.

“Kimaya’s commitment to provide the best of Indian designers to its discerning clients will now enter another level. The real India is not only in the metros but also in tier II cities like Ludhiana, Chandigarh, Pune, Lucknow, Nagpur, Kochi, Jaipur and the likes. Our focus will be on achieving pan-India penetration and presence where the demand for Indian designers is twofold the supply,” said Neha Hirani, managing director, Kimaya Fashions.

“The strong economic growth over the last decade and the rise in disposable income have led to increased demand for luxury goods among affluent Indians. But in spite of the growth, penetration of luxury goods remains low and Kimaya, with an established presence in the Indian designer wear space, is well-positioned to benefit from the growing demand for these products,” said Harshendu Bindal, president of FT India.

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