TCNS Clothing IPO

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(i)TCNS Clothing Co. Private Limited is India’s leading women’s branded apparel company in terms of a total number of exclusive brand outlets as of November 2017, according to Technopak.

(ii) They Design, Manufacture, Market and Retail a wide portfolio of women’s branded apparel across multiple brands. They sell products through 418 exclusive brand outlets, 1,305 large format store outlets and 1,361 multi-brand outlets, located in 29 states and two union territories in India. In addition to that they also have six exclusive brand outlets in Nepal, Mauritius and Sri Lanka. The company also sell the products through their own website and online retailers.

(iii)The product portfolio includes Top-wear, Bottom-wear, Drapes, Combination-sets and Accessories that cater to a wide variety of the wardrobe requirements of the Indian woman, including every-day wear, casual wear, work wear and occasion wear. The TOP brand in the portfolio is mentioned below:

a). Brand “W”:  “W” is a premium fusion wear brand, which merges Indian and western sensibilities with an emphasis on distinctive design and styling. This brand is targeted primarily at the modern Indian woman’s work and casual wear requirements. “W” has been recognized as the ‘IMAGES Most Admired Fashion Brand of the Year:  by India Fashion Forum consecutively for past three years between 2015 to 2017.  “W” had 258 exclusive brand outlets and 676 large format store outlets located across 148 cities in India and five outlets outside India.

b). Brand “Aurelia”: Aurelia is a contemporary ethnic wear brand targeted at women looking for great design, fit and quality for their casual and work wear requirements.  “Aurelia” had 159 exclusive brand outlets and 629 large format store outlets located across 149 cities in India and one outlet outside India.

c) Brand “Wishful”. Wishful is a premium occasion wear brand, with elegant designs catering to women’s apparel requirements for evening wear and occasions such as weddings, events and festivals. The Company is leveraging their “W” store network for selling Wishful products, however, they recently launched first exclusive brand outlet for Wishful, in September 2017.

iv) Revenue from sales of products under brand “W”, “Aurelia” & “Wishfulgrew” is growing at a CAGR of 48.67%,70.82% & 66.66% respectively during FY13 to FY17 . Moreover, in FY17 the revenue from “W”, “Aurelia” &  “Wishfulgrew” accounted for 61.23%,30.35% & 8.41% respectively.


Objects of the TCNS Clothing IPO:

Objective of

TCNS Clothing IPO

are: It is a pure OFS by the sale of up to 15,714,038 Equity Shares by the Selling Shareholders. The Company will not receive any proceeds from the Offer and all the proceeds will go to the Selling Shareholders.

TCNS Clothing IPO Details:

Current GMP: 11-13
Open Date: Jul 18 2018
Close Date: Jul 20 2018
Total Shares: 15,714,038
Face Value: ₹ 2 Per Equity Share
Issue Type: Book Built Issue IPO
Issue Size: 1125 Cr.
Lot Size: 20 Shares
Issue Price: ₹ 714-716 Per Equity Share
Listing At: NSE,BSE
Listing Date: Jul 30 2018

Promoters And Management:

Promoters of TCNS Clothing Co. Private Limited Company are: (i) Onkar Singh Pasricha, aged 67 years, is the Chairman, Executive Director and one of the Promoter of the company. He holds a bachelor’s degree in technology in electrical engineering from Indian Institute of Technology, Delhi. He has more than 40 years of experience in the apparel industry. (ii) Anant Kumar Daga, aged 40 years, is the Managing Director of the Company. He holds a bachelor’s degree in commerce from the University of Calcutta and a post-graduate diploma in management from Indian Institute of Management, Ahmedabad.  Prior to joining, Anant Kumar Daga has worked with Reebok, India as director (sales) and with ICICI bank. He also features in the Economic Times' 40 under 40 124 list of India’s hottest business leaders for 2017 and has been awarded the “Brand Professional of the Year Award” at the CMAI Apex Awards 2017.

Capital Structure:

(i) Authorized Share Capital 180,000,000 Equity Shares & 20,000,000 Preference Shares 38 Cr
(ii) Issued, Subscribed,& Paid-up Share Capital Before Issue 61,318,124 Equity Shares 12.26 Cr
(iii) Present Issue OFS to public 15,714,038 Equity Shares 25% of Paid up capital
(iv) Reservation for QIB  (7857019 Equity Shares at FV@2) 50%
(v) Reservation for HNI  (2357105 Equity hares at FV@2) 15%
(vi) Reservation for Retail  (5499912 Equity Shares at FV@2) 35%
(vii) Paid Up Share Capital after the issue 12.26 Cr

Financials of TCNS Clothing IPO as per DRHP:

1. Assets and Liabilities Key Parameters
Year Asset(Cr) Liabilities(Cr) Net Worth(Cr) Book Value D/E [<1.5] RONW debtor days
FY14 160.9 77.66 83.24 16 0.93 10% 131
FY15 214.39 104.09 110.3 21 0.94 24% 79
FY16 308.7 260.4 48.3 11 5.39 -86% 48
FY17 425.8 143.9 281.9 51 0.51 6% 51
FY18 576.3 144.9 431.4 77 0.34 23% 60
2. Profit n Loss Key Parameters
Year Revenue(Cr) PAT(Cr) EBITDA Margins Profit Margins Outstanding Shares( Cr) EPS
FY14 170.00 8.70 13% 5% 5.188 1.7
FY15 301.00 26.20 17% 9% 5.188 5.1
FY16 488.10 -41.60 -3.8% -9% 4.562 -9.1
FY17 712.90 15.60 11% 2% 5.57 2.8
FY18 849.10 97.70 19% 12% 5.637 17.3
3. Cash Flow Statement(all figures in Cr)
Particulars FY18 FY17 FY16 FY15 FY14
(i) Net Cash Generated from Operation 41.33 25.10 34.429 14.07 8.03
(ii) Net Cash Generated from Investment -27.61 -27.06 -27.92 -14.491 -8.443
(iii) Net Cash Generated from Financing Activity 21.01 1.17 -4.55 0.71 -1.46
(iv) Total[ (i)+(ii)+(iii) ] 34.73 -0.79 1.97 0.29 -1.87
(v) Cash at the Start of the year 1.975 2.761 0.795 0.556 2.427
(vi) Cash at the end of the year 36.71 1.98 2.76 0.85 0.56
Key Notes: a) The Revenue is growing at CAGR of 49.49% from FY14 to FY18. b) The PAT is growing at CAGR of 83.06% from FY14 to FY18. The Company has excellent growth in PAT but have suffered losses in FY16. c) The Annualized EPS for FY17-18 is 17.3. d) P/E = 40.68 at Cutoff price of 716.[ Industry P/E is 67]. e) P/B= 9.29 at cutoff price of 716. f) The company is almost debt free. g) Mcap/Sales(ideally <2)= 5.49 on FY18 sales(Higher). h) The Company has clocked 19% EBITDA Margins in FY18 an improvement from 11% in FY17. i) The Company is continuously generating positive cash flows from operations in last 5 years- Big Positive. j) The Company has excellent RONW of 23% in FY18.

Comparison With Peers:

Name of the Company FV Mcap(cr) PAT(cr) Sales(cr) Mcap/Sales RONW P/E P/B NPM
TCNS Clothing Co. Limited 2 4660 97 849 5.49 22.74% 41 9.24 11%
Page Industries 10 31743 343 2573 12.34 40.95% 91 37.0 13%
Aditya Birla Fashion and Retail 10 10855 122 7214 1.50 10.78% 92 9.95 2%
Future Lifestyle Fashions 2 7785 128 4532 1.72 8.24% 60 4.98 3%
Kewal Kiran Clothing Limited 10 1700 74 483 3.52 18.33% 26 4.3 15%
Note: 1. The Value of P/E and P/B are calculated by considering Share price on 11.07.2018. 2. All the parameters are calculated on the basis of Financials as on FY18. 3. The Industry PE is at 67.

Recommendation on TCNS Clothing IPO:

TCNS Clothing IPO Rating by InvestorZone team => 5/10 1-5: Fair 5-7: Good 7-10: Excellent

Registrar of TCNS Clothing IPO:

  1. Karvy Computershare Private Limited

Company Address:

TCNS Clothing Co. Private Limited W-House, 119, Neelagagan Towers, Mandi Road, Sultanpur, Mehrauli, New Delhi 110 030, India Phone No. +91 11 4219 3193 Fax No. +91 11 4219 3194 E-mail: Website:

Bid Details of TCNS Clothing IPO as on
20-Jul-2018 18:15:00 IST

No.of shares offered No. of shares bid No. of total times
3,142,808 42,327,060 13.47
2,357,106 11,963,760 5.08
5,499,914 3,052,660 0.56
- - -
10,999,828 57,343,480 5.21
No.of shares offered No. of shares bid No. of total times
3,142,808 14,333,440 4.56
2,357,106 7,011,680 2.97
5,499,914 2,267,460 0.41
- - -
10,999,828 23,612,580 2.15
No.of shares offered No. of shares bid No. of total times
3,142,808 27,993,620 8.91
2,357,106 4,952,080 2.10
5,499,914 785,200 0.14
- - -
10,999,828 33,730,900 3.07

Discussion on TCNS Clothing IPO:

    Good response from QIB and NII at the end. We are expecting 3-5% listing gain in TCNS Clothing. Let us see on listing day. We will meet on listing day i.e July 30 to make new strategy. Please stay tuned with for more such updates in IPOs.

    After spill over, the QIB quota- 7.58, HNI quota- 3.87 and Retail quota- 1.
    Spill over means, as Retail quota was not fully subscribed, the left over shares were distributed among QIBs and HNIs.

    Anchor list-
    Goldman Sachs India Ltd, Auburn Ltd, Fidelity Securities Fund Fidelity Blue Chip Growth Fund, DB International Asia Ltd, ICICI Prudential Life Insurance Company Ltd and UBS Principal Capital Asia Ltd.

    TCNS Clothing has allotted 47,14,210 equity shares to 18 anchor investors at Rs 716 per scrip, garnering Rs 337.54 crore.

    Apart from Pricing of the IPO and fierce competition from the unorganized sector, other parameters are looking quite strong for the company. Let us see the position of the Balance Sheet, the company has long term debt = 20 lacs and Short term debt =40K which is negligible in front of 43 cr equity. The company has excellent RONW of 22.74%. The company has manageable receivables under 60 days. The company is also generating positive cash flows from the operations.

    If anyone wants to play the story of brand in clothing, then TCNS is right kind of stock to look upon. The Branded segment in India is having market share of only 23%. So opportunity is huge in the market and company has shown 30% CAGR growth smartly outgrow the industry which is growing at a CAGR of 10%. However, the competition from unorganized sector is huge in this sector and going forward this would be a challenge for the company.

    These type of stocks only generate interest during ipo time .I don’t find this as a portfolio stock. If anyone wants to take risk for listing gains then apply after looking at subscription figures .If the subscription is good one can apply for short term only .

      I agree Tarun. This is not a portfolio stock for sure. This is not even a listing gain stock. Considering the niche, market sentiments etc it should list negative..😁

    **************************RISK in the Company**********************
    1. The company do not own any manufacturing unit and engage job workers for manufacturing all their products.The company has 37 designers on board and retaining them would be challenge for the company. The growth will dent in future if they decided to part away with company.

    2. The Company has 289 exclusive brand outlets and four warehouses located in New Delhi on a leasehold basis. All these outlet are on Lal dora area of New Delhi, the use of such land for commercial purposes has been, in recent years, subject to increasing regulation by local municipal authorities. So any changes in law will impact company’s growth in future.

    3. The Company is highly dependent on franchisee and online retailers for majority of their sales. Now a days we are seeing price war in online retail website due to huge competition, so if company is not able to pitch right price of their product they may loose significant online retail business.

    4. It is a seasonal business. Sales generally improved in and around Diwali.

    5. The industry is highly competitive. The unorganized players in the market are biggest threat to this company.

    The company has total profit of 97 Cr in FY18 on the basis of which the EPS would be around 15.92. The IPO is priced at 716, so on the basis of this price the offered P/E= 44.97. Looks pricey issue.