PE firm Kedaara Capital has acquired 10 per cent stake in Vedant Fashion, the makers of popular ethnic brand Manyavar, for Rs 400-450 crores. The merged entity of LVMH-sponsored fund L Capital Asia and PE firm Catterton, was also in the race to acquire minority stake in the company. Kolkata-based Manyavar has been aggressively spreading its retail network past five years and has more than 400 stores now. The brand has a policy of not selling even a single garment on discount.

It is also trying to push its clothes as everyday wear instead of just for weddings and social functions. The valuation of Vedant at Rs 4,000-4,500 crore is almost at par with that of Fabindia when it sold a stake to Infosys co-founder Nandan Nilekani last year, and higher than the market capitalisation of department chain Shoppers Stop.

The Kolkata-based company posted a net profit of Rs 90 crore in fiscal 2015-16, the highest within the country’s apparel sector, on sales of Rs 504 crore. A minority stake has been given to Kedaara Capital, says founder Ravi Modi. Indian wear, initially popular among older people is now accepted among younger consumers as well, and Manyavar now sells fusion clothing a mix of modern and traditional wear instead of just ethnic which are reserved for special occasions. The company is seeing potential in women ethnic wear and opened a subset, Mohey.