Tata Capital is considering acquiring the fashion brand Rare Rabbit at a valuation of $300 million, according to sources.

 Tata Capital, the financial services arm of the Tata conglomerate, is exploring the acquisition of a 13% stake in Rare Rabbit, a premium Indian fashion brand, valuing it at $300 million. This move aligns with Tata's strategy to tap into the affluent consumer market, a trend mirrored by competitors like Reliance, led by billionaire Mukesh Ambani, who are also focusing on premium offerings.

Sources revealed that Tata Capital has engaged in talks with Rare Rabbit, conducting due diligence following the issuance of a term sheet proposing an investment of up to $40 million for a stake in the niche fashion brand. Rare Rabbit, founded in 2015 by Radhamani Textiles, offers a range of men's apparel, including shirts, jeans, jackets, and sneakers, with prices ranging from $20 to $80. The company operates online and boasts 90 retail outlets across India.

India's fashion sector has witnessed significant attention from both domestic and foreign brands, with names like Tommy Hilfiger and Uniqlo making notable entries. Retail giants like Reliance and Tata Group have also expanded their presence by catering to the middle-class segment with mid-range clothing.

The ongoing discussions regarding the stake sale represent Rare Rabbit's inaugural external fundraising endeavor. A local Indian private equity firm, A91 Partners, is reportedly vying for a stake in the company, competing with Tata for the deal. These developments underscore the competitive landscape in India's fashion industry and the strategic interest of major players in aligning with consumer trends and preferences.

As talks continue, the potential investment in Rare Rabbit presents an opportunity for Tata Capital to strengthen its position in the premium fashion market and capitalize on the evolving consumer dynamics in India.