Aditya Birla leads race to acquire TCNS stake

Aditya Birla Fashion and Retail Ltd (ABFRL) has emerged as the front runner to acquire a majority stake in TCNS Clothing Ltd, the owner of the popular women’s wear brands W and Aurelia, two people aware of the matter said

Deborshi Chaki & Swaraj Singh Dhanjal
Updated25 Dec 2022, 10:37 PM IST
TCNS’ bouquet of brands includes W, Wishful, Aurelia and Elleven.
TCNS’ bouquet of brands includes W, Wishful, Aurelia and Elleven.

Mumbai: Aditya Birla Fashion and Retail Ltd (ABFRL) has emerged as the front runner to acquire a majority stake in TCNS Clothing Ltd, the owner of the popular women’s wear brands W and Aurelia, two people aware of the matter said.

Mint had reported that suitors, including Reliance Retail, Nykaa, ABFRL, and Trent, besides private equity investors TPG Capital, have shown interest in picking up a controlling stake in the firm.

“Aditya Birla is in advanced talks to acquire a 51% stake in TCNS Clothing, which includes private equity investor TA Associates’ 29% stake, a part of the promoter stake, and from the public in a subsequent open offer. The current professional management will continue to drive the company, and the promoters will also continue with their remaining stake,” one of the two people cited above said, seeking anonymity.

The deal will be a mix of stock and cash, and is likely to be signed and announced soon, he added.

“The transaction will provide Aditya Birla Fashion access to a strong portfolio of women’s wear brands with a strong distribution network,” he added.

TA Associates holds a 29.24% stake in the company, while promoters hold 32%.

TA Associates picked up a 40% stake in TCNS in 2016 in a $140 million investment round. The private equity firm sold a part of its stake in the company’s IPO in 2018.

At the current market cap, a 51% stake in TCNS Clothing is worth nearly 1,746 crore.

“Given TCNS’ leading position in the women’s wear segment, wide presence in the market, its strong brands and its expansion into other categories beyond apparel, there is a strong interest among strategists to explore this transaction,” the second person cited above said, also seeking anonymity.

Emails and text messages sent to TCNS managing director Anant Daga did not elicit any response. Emails to spokespeople for ABFRL and TA Associates, too, went unanswered.

TCNS Clothing reported a 46% growth in revenue in the September quarter from a year ago to 350.5 crore.

However, operating profit grew by just 6% to 47.9 crore, while net profit declined 31% to 7.6 crore.

“TCNS’ Q2 Ebitda (earnings before interest, taxes, depreciation, and amortization) was about 17% lower than the street and our estimates, led by nearly 300 bps miss on the margins front. Lower margins were led by higher marketing and growth investments, which are expected to continue. In Q3 (festive sales), the Aurelia brand has returned to pre-covid levels on a like-to-like (LTL) basis, but recovery for the W brand is lagging due to slower traction in certain styles (fabric issue). Ongoing festive recovery is slower versus our expectations of about 15% LTL growth (versus pre-covid levels) across channels, leading to a nearly 10% cut in our FY23 revenue estimates. Our FY24E revenue estimates factor in nearly 8% LTL growth versus pre-covid, which seems fair given the introduction of accessories and price hikes,” brokerage Emkay Global said in a 12 November report.

Catch all the Business News , Corporate news , Breaking News Events and Latest News Updates on Live Mint. Download The Mint News App to get Daily Market Updates.

MoreLess
First Published:25 Dec 2022, 10:37 PM IST
Business NewsCompaniesNewsAditya Birla leads race to acquire TCNS stake

Get Instant Loan up to ₹10 Lakh!

  • Employment Type

    Most Active Stocks

    ITC share price

    481.30
    03:52 PM | 6 NOV 2024
    1.25 (0.26%)

    Tata Steel share price

    153.60
    03:59 PM | 6 NOV 2024
    1.3 (0.85%)

    Infosys share price

    1,824.30
    03:58 PM | 6 NOV 2024
    70.5 (4.02%)

    Larsen & Toubro share price

    3,646.65
    03:44 PM | 6 NOV 2024
    71.25 (1.99%)
    More Active Stocks

    Market Snapshot

    • Top Gainers
    • Top Losers
    • 52 Week High

    National Aluminium Company share price

    245.00
    03:55 PM | 6 NOV 2024
    10 (4.26%)

    EPL share price

    270.15
    03:42 PM | 6 NOV 2024
    8.15 (3.11%)

    Firstsource Solutions share price

    380.35
    03:53 PM | 6 NOV 2024
    10.95 (2.96%)

    City Union Bank share price

    178.85
    03:29 PM | 6 NOV 2024
    0.15 (0.08%)
    More from 52 Week High

    Hindustan Zinc share price

    513.15
    03:54 PM | 6 NOV 2024
    -46.3 (-8.28%)

    Great Eastern Shipping Company share price

    1,257.65
    03:53 PM | 6 NOV 2024
    -36.35 (-2.81%)

    Five Star Business Finance share price

    654.85
    03:43 PM | 6 NOV 2024
    -18.8 (-2.79%)

    Triveni Engineering & Indus share price

    406.00
    03:29 PM | 6 NOV 2024
    -11.25 (-2.7%)
    More from Top Losers

    Syrma SGS Technology share price

    554.00
    03:51 PM | 6 NOV 2024
    47.45 (9.37%)

    Dixon Technologies (India) share price

    15,658.95
    03:43 PM | 6 NOV 2024
    1262.95 (8.77%)

    Tejas Networks share price

    1,409.95
    03:55 PM | 6 NOV 2024
    101.7 (7.77%)

    Eclerx Services share price

    3,263.35
    03:52 PM | 6 NOV 2024
    231.45 (7.63%)
    More from Top Gainers

    Recommended For You

      More Recommendations

      Gold Prices

      • 24K
      • 22K
      Bangalore
      80,365.00110.00
      Chennai
      80,371.00110.00
      Delhi
      80,523.00110.00
      Kolkata
      80,375.00110.00

      Fuel Price

      • Petrol
      • Diesel
      Bangalore
      102.92/L0.00
      Chennai
      100.80/L0.00
      Kolkata
      104.95/L0.00
      New Delhi
      94.77/L0.00

      Popular in Companies

        HomeMarketsloanPremiumMint Shorts