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TCNS Clothing in talks with Reliance Retail, ABFRL as backer TA Associates seeks partial-to-total exit

TCNS Clothing [NSE: TCNSBRANDS], a New Delhi, India-based women’s branded apparel company, is in talks with Reliance Retail and Aditya Birla Fashion and Retail (ABFRL) [NSE:ABFRL], as its private equity backer TA Associates seeks a partial-to-total exit, according to two sources familiar with the situation. 

Boston-headquartered TA Associates came onboard TCNS Clothing in 2016 by investing USD 140m, it announced at the time. TA Associates currently holds around a 29.2% stake. Other investors include Singapore-based Nalanda Capital, which holds a 7.01% stake, and Elevation Capital (formerly SAIF Partners) with a 5.38% stake, as per BSE website. 

The upcoming deal may also see TCNS’ promoter group, the Pasricha family, consider a partial-to-total exit, the sources noted.  

Noting that the talks are at an exploratory stage, one of the sources added that both the prospective suitors — Reliance Retail and ABFRL — would prefer a controlling stake. Deal size would be ascertained based on how the discussions proceed and the stake sizes that the promoter group and investors are looking to part with, the source said. 

TCNS currently commands a market capitalization of INR 38.94bn (USD 470.6m). The scrip was trading at INR 628.35 a piece today (Oct 25), down 2% from the previous close on the BSE, as per exchange data. 

TCNS Clothing, Reliance Retail, ABFRL and TA Associates did not respond to requests seeking comments. 

Established in 1972, TCNS Clothing owns women’s wear brands W, Aurelia, Wishful and Elleven. The company designs, manufactures, markets and retails a variety of women’s branded apparel, footwear, cosmetics and accessories across the brands, as per its website.  

TCNS products are sold through more than 550 exclusive brand stores, over 2000 large format stores and, around 1000 multi-brand outlets, online brand stores and other marketplaces. Beside India, its products are sold in Mauritius, Sri Lanka and Nepal, per the company’s Linkedin page. 

Other deals in the segment include Fashinza, a Gurugram-based B2B apparel manufacturing platform, which raised USD 100m in a Series B funding round co-led by Prosus Ventures and WestBridge Capital in May this year. The funding round, which was a combination of equity and debt, saw participation from Fashinza’s existing investors Accel, Elevation and DisruptAD among others, per local media reports at the time.