TCNS IPO prospects good but there's little room for near-term growth

As of FY17, the women's apparel market in India, growing faster than that of men's wear, was $19 billion and is expected to reach $42 billion by FY25

TCNS Clothing Company is coming with an Initial Public Offer (IPO) of equity, involving an offer for sale of 15.71 million shares. Its business prospects look good, with healthy past performance and experienced management; however, the stock valuation suggests investors looking for immediate gains might get disappointed. Analysts, thus, suggest only long-term investors should subscribe.

TCNS is a leading women’s branded apparel company, the target customers being those with jobs. Set up in December 1997, it had cumulative annual sales growth of 32 per cent during FY16-18. Its portfolio has three prominent brands—W (58 per cent of sales in FY18), Aurelia