Aditya Birla leads race to acquire TCNS stake

Aditya Birla leads race to acquire TCNS stake

Mumbai: Aditya Birla Fashion and Retail Ltd (ABFRL) has become a favorite to acquire a majority stake in TCNS Clothing Ltd, owner of famous women’s clothing brands W and Aurelia, two acquaintances belonging to this matter said. Corresponds say pursuers including Reliance Retail, Nykaa, ABFRL and Trent, in addition to private equity investors TPG Capital, have expressed interest in taking a majority stake in the company.

Corresponds say pursuers including Reliance Retail, Nykaa, ABFRL and Trent, in addition to private equity investors TPG Capital, have expressed interest in taking a majority stake in the company.

Aditya Birla leads race to acquire TCNS stake

Aditya Birla is in advanced talks to buy a 51% stake in TCNS Clothing, including a 29% stake by private equity investor TA Associates, part promoter, and public equity as a part of the next public offering.

The current specialist managing will continue to run the business and the promoters will also continue with their remaining shares,” one of the two people is quoted as saying. above, speaking on condition of anonymity. The deal, which will be a combination of equity and cash, is expected to be signed and announced soon, he added.

“The transaction will provide Aditya Birla Fashion with access to a robust portfolio of women’s clothing brands with a strong distribution network,” he added. TA Associates owns 29.2 % of the company, while promoters own 32%. purchased a 0% stake in TCNS in 2016 as part of a $1 0 million investment round.

The private equity firm sold part of its stake in the company’s IPO in 2018. At current market capitalization, a 51% stake in TCNS Clothing is worth almost ₹1,7 6 crore. “Given TCNS’s leading position in the women’s clothing segment, broad market presence, strong brands and expansion into categories other than clothing, strategists are very interested in discovering this transaction,” said the second person quoted above. E-mails and SMS messages sent to TCNS general manager, Anant Daga, did not receive any response.

Emails to spokespersons for ABFRL and TA Associates were also unanswered. a quarter of a year ago at ₹350.5 crore. However, operating profit increased only 6% to 7.9 crore, while net profit fell 31% to 7.6 crore. TCNS Q2 EBITDA (earnings before interest, taxes, depreciation and amortization) is about 17% below our and street estimates, due to nearly 300 basis points on profit margin. Lower margins, driven by higher growth and marketing investments, are expected to continue.

During the third quarter (festival sales), the Aurelia brand returned to previous levels. covid on a similar basis (LTL), but W brand recovery slowed down due to some slower pulling patterns (fabric issue) Festive recovery is going slower than expected Our LTL ~15% (compared to pre-covid) growth across all channels, resulting in a nearly 10% drop in our FY 2023 revenue estimate.

Our revenue estimate for FY202 assumes LTL growth of close to 8% pre-covid, which seems reasonable considering the introduction of accessories and price hikes. brokerage firm Emkay Global said in a report on November 12.

 

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