Tata Capital Eyes Rare Rabbit Fashion Brand, Targeting a Valuation of $300 Million, Sources

As it looks to capitalise on the nation’s affluent consumers, Tata Capital is aiming to buy a roughly 13% interest in premium domestic fashion brand Rare Rabbit at a $300 million value, according to three people familiar with the situation.

The $144 billion Tata conglomerate in India’s financial services sector, Tata Capital, has invested in Rare Rabbit at a time when its competitors, including billionaire Mukesh Ambani’s Reliance, are also flocking toward high-end fashion items.

According to the three sources, Tata has communicated with Rare Rabbit and is carrying out due diligence following the issuance of a term sheet for an investment of up to $40 million to acquire a share in the specialised clothing company that offers men’s shirts and other items.

In recent years, India’s fashion and apparel industry has attracted major Indian and international firms, such as Japan’s Uniqlo and Tommy Hilfiger. Retailers like Reliance and Tata Group operate their retail chains with the goal of catering to the growing middle-class market by offering mid-range apparel at their locations around the country.

Rare Rabbit is raising money externally for the first time with the ongoing stake sale discussions.

According to the three sources, Tata is facing competition from A91 Partners, a local private equity firm in India, which is also interested in buying a stake in the business. A91 said that it would not comment.

Furthermore, according to a press statement from the company, Macquarie Capital, the investing division of Australia’s top investor Macquarie Group, has purchased a minority interest in ChargeZone, a well-known EV charging business in India.

The stock of several Indian conglomerates, such as the House of Tatas, Adani Group, Bharti Group, Murugappa Group, and Aditya Birla, has increased, significantly increasing investor wealth. Since September 24, 2021, when the Sensex reached 60,000 points, the group, led by N Chandrasekaran, has increased investor wealth by around Rs 6 lakh cr, representing a 25% return.

However, the Sensex, which has returned 16% over the last 2.2 years, outperformed Mukesh Ambani’s RIL and Bajaj Group. Four other groups produced returns exceeding 100%, excluding Murugappa. With its two listed businesses, Varun Beverages and Devyani International, Venu Srinivasan’s TVS Group and Ravi Jaipuria Group produced returns of 204% and 226%, respectively.