Nykaa, Reliance Retail, Aditya Birla Fashion in race to buy promoter stake in TCNS: Report

However, TCNS broke its silence on the news of the stake sale and said that it does not have any information with respect to the appointment of any investment bank by its promoters in relation to the sale of a stake of the company, and the company does not comment on any market speculation

Reliance Retail, Nykaa and Aditya Birla Fashion are in the race for acquiring TA Associates’ 29.24 per cent stake in TCNS Clothing Ltd, the owner of women’s fashion brands Aurelia and W, according to a Mint report. Two people who are aware of the development told the media outlet that private equity investors like Advent International and TPG Capital are also interested in the deal. TA Associates’ stake in the company is worth Rs 1000 crore. The purchase of the firm’s entire stake could also trigger an open offer to buy an additional 26 per cent of public shareholding in TCNS Clothing. The promoters of TCNS Clothing may also sell their 32 per cent stake in the company, as per sources.

According to reports, TA Associates had bought a 40 per cent stake in the company back in 2016 but sold part of its portion in 2018. For the upcoming stake sale, it will be advised by investment bank Avendus Capital.

Spokespeople of TPG Capital, Reliance Retail, Nykaa and Aditya Birla Fashion declined to comment on the matter.

According to a source, the stake sale has seen considerable interest. “Both strategic and PE investors are looking at TA Associates’ stake. The promoters are also likely to sell their stake, but they will prefer to sell to a strategic investor if the valuation offered is attractive, else they may consider continuing with another new private equity investor," the source stated.

However, TCNS broke its silence on the news of the stake sale and said that it “does not have any information with respect to the appointment of any investment bank by its promoters in relation to the sale of a stake of the company, and the company does not comment on any market speculation”.

Investor interest in apparel companies has risen after the pandemic restrictions eased since people are now buying new clothes for work, parties and home. TCNS Clothing, with its brands W and Aurelia, is a big player in the market. Aurelia and W contributed 41 and 52 per cent, respectively, to TCNS’ business in the September quarter.

In the September quarter, TCNS Clothing’s operating profit grew by 6 per cent to Rs 47.9 crore. Its net profit fell 31 per cent to Rs 7.6 crore.

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