Aditya Birla Fashion & Retail (ABFRL) aims to expand its ethnic wear portfolio, and this acquisition is expected to help the company increase its ethnic wear portfolio value to Rs 5000 crore in the next three years.

ABFRL will acquire up to 29% stake in TCNS Clothing through a conditional open offer at Rs 503 per share from public shareholders. The remaining stake will be bought from the founder promoters, and ABFRL will hold a 51% stake in TCNS. After the merger, TCNS shareholders will receive 11 shares of ABFRL for every 6 shares held in TCNS.

Kumar Mangalam Birla, chairman of the Aditya Birla Group, stated that the acquisition of TCNS Clothing is a significant milestone for ABFRL, as it complements the company's existing portfolio of exceptional brands in the Indian fashion space. The acquisition is a marker of the Aditya Birla Group's faith in the dynamism and buoyancy of the Indian consumer economy, which is on the cusp of a multi-decadal consumption boom. Birla also emphasized the company's commitment to ethnic wear, the largest category in the apparel industry, and stated that the acquisition will help ABFRL achieve transformational growth.

ABFRL is a pure-play fashion powerhouse and part of the Aditya Birla Group, a leading Indian conglomerate. It had a revenue of Rs. 8,136 Cr. and a retail space of 9.2 million sq. ft. as of 31 March 2022. The company has a network of 3,468 stores across approximately 28,585 multi-brand outlets with 6,515 point of sales in department stores across India. Its portfolio of leading fashion brands and retail formats includes Louis Philippe, Van Heusen, Allen Solly, Peter England, and Pantaloons, among others. The company also has a portfolio of international brands, including Ralph Lauren, Hackett London, Ted Baker, Forever 21, American Eagle, and Reebok, and a foray into branded ethnic wear business with brands such as Jaypore, Tasva & Marigold Lane. ABFRL has strategic partnerships with designers such as Shantanu & Nikhil, Tarun Tahiliani, Sabyasachi, and House of Masaba.

ABFRL's consolidated net profit declined 91.7% to Rs 15.79 crore on 20% jump in net sales to Rs 3,588.80 crore in Q3 FY23 over Q3 FY22.

TCNS is a top women's branded apparel company in India that offers a wide range of apparel and accessories for women, including top-wear, bottom-wear, drapes, combination sets, and accessories, catering to various wardrobe needs. The company markets its products through a network of over 4,000 outlets, including exclusive brand outlets, large-format store outlets, and multi-brand outlets in India, Nepal, Mauritius, and Sri Lanka. TCNS also offers its products through its brand websites and online retailers.

TCNS Clothing's net profit declined 98% to Rs 0.50 crore on 6.81% fall in net sales to Rs 306.14 crore in Q3 FY23 over Q3 FY22.

Shares of ABFRL fell 4.65% to Rs 214.20, while TCNS jumped 4.77% to Rs 520.80 on Friday, 5 May 2023.