A customer browses women’s clothing at a store in Mumbai, India. (Photographer: Dhiraj Singh/Bloomberg)

TCNS Clothing Ends 7.9% Below IPO Price On Stock Market Debut

TCNS Clothing Co. Ltd. closed 7.9 percent lower at Rs 659.15 apiece over its IPO price of Rs 716 on its stock market debut. Shares of the owner of brands like ‘W’, ‘Aurelia’ and ‘Wishful’ saw an intraday low of Rs 626 and high of Rs 725 during the session on the BSE Ltd..

The apparel maker’s Rs 1,125-crore initial public offering subscribed 5.2 times on the final day of bidding on July 20. Four promoters, the current managing director and an investor Wagner Ltd. offloaded stakes through the maiden offer, which was an offer for sale.

Business

TCNS Clothing is a designer, manufacturer, marketer and retailer of women’s branded apparel. The revenue of its three brands—W, Aurelia and Wishful—grew at an annualised rate of 23.4 percent, 47.8 percent and 39.7 percent, respectively, in the last three financial years. The garment maker generates most of its revenue from the brand ‘W’.

The company sells products through 465 exclusive brand outlets, 1,469 large format stores and 1,522 multi-brand outlets located in 31 states and union territories. It has six exclusive brand outlets in Nepal, Mauritius and Sri Lanka.

"We have about 465 stores in India and the company plans to add about 75-80 stores every year in the next few years," its Managing Director Anant Daga told BloombergQuint in an interaction, adding that the company is currently operating in three other countries – Mauritius, Nepal and Sri Lanka.

TCNS Clothing retails products through large format stores such as Pantaloons, Shoppers Stop and Lifestyle, through online retailers like Myntra, Jabong and Amazon, among others, and through their websites—wforwoman.com and shopforaurelia.com.

Financials

The company’s net worth as of March 2018 stood at Rs 431 crore, translating to a book value of Rs 70 a share.

TCNS Clothing’s revenue has been growing at an annualised rate of 49.1 percent over financial years 2014-2018. Net profit during the period grew 83 percent annually. For the financial year 2017-18, the net profit stood at Rs 98 crore due to lower employee cost and tax expense and higher other income.

The earnings before interest, tax and depreciation and amortisation had a compounded annual growth rate of 63 percent, while Ebitda margin averaged around 11.8 percent in the last five financial years.

Valuations

The earnings per share for financial year 2017-18 is Rs 16. The price-to-earnings multiple stands at 44.8 at the upper end of the price band, according to BloombergQuint’s calculations.