TA Associates-backed firm behind womenswear label W gets SEBI nod for IPO
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Women’s apparel maker TCNS Clothing Co Ltd, which owns the ‘W’ brand of clothing, has received regulatory approval to float an initial public offering.

The Securities and Exchange Board of India (SEBI) issued final observations to TCNS Clothing’s IPO proposal on 4 May. This makes it the 16th company to receive regulatory clearance for an IPO in 2018.

TCNS Clothing, which counts US-based private equity investor TA Associates as its backer, had filed its draft proposal on 26 February.

TCNS Clothing’s public issue is entirely a secondary market sale of 15.71 million shares by promoters and Wagner Ltd, an affiliate of TA Associates.

The IPO size is estimated at Rs 800 crore ($122 million), said two persons aware of the matter, requesting anonymity.

TA Associates will sell 6.91 million shares, a little over one-fourth of its holding in the IPO. Its stake may dilute to about 31.6% from 43.72% at the time of filing the draft red herring prospectus.

Onkar Singh Pasricha-led TCNS Clothing had recently won the portfolio company awards (consumer segment) at the recently held News Corp VCCircle India Limited Partners Summit.

TA Associates had, in August 2016, invested $140 million in TCNS, making it the biggest-ever PE deal in the Indian apparel industry. It valued the firm at around Rs 2,130 crore ($317 million then), as per VCCircle estimates.

Kotak Mahindra Capital Co and Citigroup Global Markets India are merchant bankers to the IPO.


Headquartered in New Delhi, TCNS Clothing designs, manufactures and sells contemporary ethnic wear, targeting women between the ages of 25 and 40. It entered retailing in 2002 when it set up its first outlet in the national capital.

The company had 418 exclusive brand outlets, 1,305 large format store outlets and 1,361 multi-brand outlets in 29 states and two union territories in India as on 30 September 2017. It has six exclusive brand outlets in Nepal, Mauritius and Sri Lanka.

The firm has three brands—W, Aurelia and Wishful. W is a premium fusion wear brand, which merges Indian and western sensibilities. The brand accounted for 61% of the company’s total revenue in 2016-17.

Aurelia is a contemporary ethnic wear brand targeted at women and accounted for 30.35% of the company’s revenues in last financial year. Wishful is a premium occasion wear brand for evening wear and occasions such as weddings, events and festivals.

The company reported a net profit of Rs 57.97 crore for the six months ended 30 September 2017 on total revenue (from operations) of Rs 430.77 crore. For 2016-17 and 2015-16, the company reported revenue of Rs 723.14 crore and Rs 488.41 crore, respectively. Its net profit stood at Rs 89.13 crore and 49.09 crore, respectively, in 2016-17 and 2015-16.

The company’s revenue grew at a compounded annual rate of 40% during the five-year prior starting 2012-13. Its net profit rose at a CAGR of 80% during the five-year period.

Apparel sector deals

The apparel industry has seen huge interest from private equity investors in the past few years.

In 2013, womenswear company Biba attracted Warburg Pincus and Faering Capital while House of Anita Dongre Ltd (formerly AND Designs), the firm behind AND label, brought in General Atlantic as a private equity investor.

In September 2016, Ahmedabad-based apparel maker Arvind Ltd had sold a stake in unit Arvind Lifestyle Brands Ltd to Multiples Private Equity.

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