Matrix Partners India invests Rs.60 crore in TCNS Clothing

Private investment in the apparel industry is back in India.

In one of the first ventures registered in the Indian apparel retail this year, Matrix Partners India invested Rs.60 crore in TCNS Clothing Co. Pvt. Ltd, an Indian brand which makes and markets a women’s apparel brand called ‘W’.

As revealed by both companies in their respective official communicates, TCNS will use the money to expand operations, open more stores, and build its brand. “We are looking at doubling our footprint by next year,” chief executive Anant Daga said, adding that his firm had started the process of raising funds in June. The W brand is available at about 100 exclusive shops in more than 40 cities and at over 600 points of sale in multi-brand stores.

"In Matrix, we found a meeting of minds and ambition.'W' will benefit greatly from their market knowledge and the management expertise of the partners, especially Amit Kapoor who has joined our board," TCNS Clothing Company Chairman OS Pasricha said in a statement. “The Indian women’s wear market is large, unorganized and untapped,” said Amit Kapoor, new managing director at Matrix India. “Being a leading women’s wear brand, ‘W’ is well positioned to capitalize on this opportunity.”

Matrix Partners, which has $300 million under management, has earlier invested in Brand Marketing India, which has exclusive licensing rights in India for Calvin Klein.

After a rush of investments in the apparel retail sector last year, there were no private equity investments this year within the country as investors’ judged that expanding business was challenging in India. Since 2008, about $245 million has been pumped into the sector, according to VCCEdge, a financial research firm.

However, according to Abhishek Ranganathan, an analyst at MF Global Sify Securities India Pvt. Ltd, if there is a unique proposition such as women’s apparel that has growth potential and good pricing power, then such models will attract investors. “Also, if it’s a smaller brand, then investors will want to invest in it so that they can participate in the growth,” he said.

Women apparel is rapidly becoming the new gold mine within the textile and fashion industries in India, boosted by the increase in the number of women in the urban workforce that has led to discretionary spending by them, giving an impetus to women’s apparel, according to a 2011 report by retail consultancy firm Images Group. The women’s ethnic wear market is worth about Rs.75,000 crore, the report added.

The segments of women’s wear and kid’s wear, with high growth rates of 12% and 10.5%, respectively, will be the growth drivers for the readymade garments industry, analysts from Images Group advanced.