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Home >Market >Stock-market-news >TCNS Clothing makes tepid stock market debut, shares flat

New Delhi: TCNS Clothing Co. Ltd made a tepid stock markets debut on Monday. The women’s apparel maker was listed on the bourses at 706.45, down 1.3% from its issue price of 716. The issue with a price band of 714-716 per share was open for subscription between July 18 and July 20. It was subscribed 5.27 times.

The women apparel maker, which sells its products under W, Aurelia and Wishful brands aimed to raise nearly 1,125-crore through the offer. Promoters of the company, along with private equity investor TA Associates, sold 15.71 million shares or 25.63% stake through the IPO.

TA Associates intended to sell 11.27% stake that aimed to fetch 495 crore at the upper end of the price band. TA Associates holds 40.6% in TCNS Clothing.

US-based private equity firm TA Associates invested $140 million in TCNS Clothing in August 2016. As part of its investment, TA acquired the stake of venture capital firm Matrix Partners, which had invested about 100 crore in TCNS Clothing since 2011.

Analysts said that the company posted excellent CAGR of 49% and 83% in revenue and net profit over FY2014-18 (although on a low base), driven by increase in its product offerings and retail stores. Gross margin were at 55-60% over the same period. However, its employees cost has been high.

Ahead of the issue, analysts had said that the company is exposed to volatility in raw material prices, which forms a significant portion of expenses. TCNS main products are casual wear and ethnic wear kurtis.

With competition in the product line, a delay in catching up with the latest trends would give a chance to the peers to grab the company’s share in market. Also, its focus only on one kind of product puts pressure on the company to continuously bring innovation in its products.

It has the widest distribution network (in woman apparel) with 465 exclusive brand outlets, 1,469 large format store outlets and 1,522 multi-brand outlets. As of March 31, 2018, it also sold its products through six exclusive brand outlets in Nepal, Mauritius and Sri Lanka. In addition, it also sells its products through own website and online retailers.

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