Aditya Birla Fashion and Retail Ltd (ABFRL) on Friday said the company is acquiring a controlling stake in TCNS Clothing, the owner of leading ethnic brands W, Aurelia, Wishful, Folksong, and Elleven.

Share Market Live

NSE

The transaction will be carried out through the acquisition of the founding promoter's stake through a SPA and a conditional public open offer followed by a merger between the two entities, the company said in an exchange filing.

The value of the promoter stake and open offer consideration for TCNS is Rs 1,650 crore for a 51 percent stake, making this one of the largest deals in the Indian fashion space.

Also Read: Google employees complain about CEO Sundar Pichai’s pay raise amid cost-cutting measures

As part of the transaction, ABFRL will make a conditional open offer to acquire up to a 29 percent stake at Rs 503 per share from public shareholders and acquire the remaining stake from the founder promoters to reach an overall shareholding of 51 percent in TCNS.

Pursuant to this, TCNS will be amalgamated with ABFRL under the merger scheme wherein public shareholders of TCNS (as of effective date) will receive 11 shares of ABFRL for every 6 shares that they hold in TCNS.

The acquisition comes at a time when ABFRl has been expanding its ethnic and ocassion wear portfolio aggressively. In the past few years, the company has also acquired stakes in Indian luxury designers like Sabyasachi, Tarun Tahiliani, Masaba Gupta, among others.

With this acquisition, ABFRL's ethnic wear portfolio is expected to reach Rs 5,000 crore in the next 3 years.

Kumar Mangalam Birla, chairman of Aditya Birla Group, said this deal is yet another marker of the Aditya Birla Group’s faith in the dynamism and buoyancy of the Indian consumer economy. For ABFRL, the TCNS deal is indeed a significant milestone as it complements our existing portfolio of exceptional brands across the entire spectrum of Indian fashion. "By embracing TCNS's portfolio of loved women’s ethnic brands, we are reinforcing our commitment to ethnic wear, the largest category in the apparel industry," he said.

Also Read: Godrej Properties Q4 Results: Net profit rises 58% to Rs 412 crore; shares rise

TCNS, which sells ethnic brands W, Aurelia, Wishful, Folksong and Elleven, clocked a turnover of Rs 896 crore in FY23. Arvinder Singh Pasricha, Onkar Singh Pasricha, Saranpreet Pasricha & Parmeet Pasricha are promoters of the company.

"TCNS, through its brands W, Aurelia, Wishful, Folksong & Elleven, is catering to the Indian women’s fashion needs across markets and price points. Each of these brands has been built over a long period of time and enjoys tremendous consumer love. This transaction is a pivotal piece of our strategy of building India’s most comprehensive ethnic wear portfolio," Ashish Dikshit, Managing Director, ABFRL said.

Anant Daga, managing director of TCNS said the company has been a pioneer in branded women’s ethnic wear market in the country. Over the last 20 years, we have built India’s most successful women’s franchise on the back of our leading brands.

"The market continues to offer long-term growth opportunities and our partnership with ABFRL will help us fully realize this potential. ABFRL’s proven brand-building capability, distribution strength, and strong ecosystem of partners will help our brands into its next phase of growth and profitability," he added.

The transaction is subject to customary regulatory approvals including approvals from the Competition Commission of India, SEBI, stock exchanges, and National Company Law Tribunal, it added.

Also Read: SJVN Green Energy bags orders worth Rs 800 cr from Gujarat government

First Published:May 6, 2023 12:04 AM IST