The promoters and shareholders of Fabindia are reportedly in discussions with the Tata group about acquiring a portion of or the entire ethnic clothing company, according to sources.
The acquisition is expected to be valued at less than the US $ 2.5 billion estimated by the garment company’s cancelled initial public offering, according to sources, but discussions are still ongoing.
If approved, the transaction may be the biggest in the industry following Aditya Birla Fashion Retail’s purchase of TCNS Clothing’s majority interest last year.
This will be a calculated addition to the Tatas’ range of ethnic clothing. Trent’s retail division offers clothing under the Westside, Zudio, and Utsa brand names. Additionally, the Tata company shares the same values as Fabindia, which produces its goods using traditional methods and ecologically sourced hand-woven materials.
It was reported that The Tata group and Trent declined comment and a spokesman for Fabindia denied that any talks were on.
For the past three years, Fabindia, which mostly offers high-end ethnic clothing, has been losing money. Based on statistics from Tracxn, it claimed sales of Rs. 1,668 crore for FY ’23, up 21 per cent from the previous year. Expenses, on the other hand, increased by 5 per cent to Rs. 1,730 crore. The data from the cash flow statement shows that it had negative cash balances at the end of FY ’23.