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Several mid-sized apparel makers looking out for investors

Encouraged by successful fund-raising by women’s wear brand ‘W’, several mid-sized apparel makers have initiated talks with private equity firms to raise funds for their business. One such company is Esjay International Pvt. Ltd and the other is Soch Apparels Pvt. Ltd. The former has hired bankers to raise funds in the range of Rs 50-100 crore, it is heard. Their previous attempts to raise funds were unsuccessful because of differences on valuations.

The said company is in discussions with private equity investors to raise about Rs 50 crore by diluting about 15-20 per cent in the company. The Sunil Jhangiani-led Esjay launched the Chemistry brand way back in 2004. Jhangiani, whose family owns Esjay, failed to raise money in 2013 because of a disagreement with investors over the firm’s valuation.

Bengaluru-based Soch Apparels Pvt. Ltd, the owner of women’s wear brand Soch, is also in plans to raise funds from investors. The Boutique Investment Bank is helping Soch find investors.
The third company is Dixcy Textiles Pvt. Ltd., the owner of the Dixcy Scott underwear brand, is also planning to raise about Rs300 crore from private equity investors. Currently, it is in the process of hiring investment bank Avendus Capital Pvt. Ltd to help it to find investors.

The size of the Indian women’s apparel market will reach $20 billion in 2020, from $13 billion last year growing at an annual average pace of 10 per cent, according to estimates by Avendus Capital. The branded portion of this market that was approximately 17 per cent in 2015 is expected to exceed 38 per cent n the next 10 years.