Advent International, the leading US-based private equity investor, has acquired significant stake in Dixcy Textiles Pvt. Ltd, the South Indian firm which sells leading innerwear brand Dixcy Scott. Dixcy company’s Founder and Managing Director Prem Prakash Sikka will retain a stake in the company and continue as the Chairman following the completion of the transaction, said a company statement. Financial terms and other details were not disclosed.

Private equity fund Advent International is in talks to buy a stake in underwear brand Dixcy Scott, and Avendus Capital Pvt. Ltd has been hired by Dixcy to find an investor. Dixcy plans to raise money from private equity funds at a valuation of Rs. 3,000-3,400 cr. Once fully invested, the fund will end up with a controlling stake in the company. This will be Advent’s fourth investment in India since 2015.

Tirupur-based Dixcy that sells under the flagship Dixcy Scott brand name was founded by Raghul Sikka in 1982. The company also sells a premium range of products including casual wear, such as track pants, shorts and polo T-shirts. Additionally, Dixcy has begun to expand internationally by placing its products in stores across the Middle East and Singapore. It has a network of more than 1,000 distributors, and supplies its products to over 1,20,000 retail outlets across the country. The company employs over 3,500 people and generated sales of Rs. 780 cr ($120 mn) in fiscal year 2017.

Raghul Sikka, Director of Dixcy said that they look forward to working with Advent to further expand the business, following a twin-pronged strategy involving organic growth from the existing offerings and expanding internationally to newer geographies.

The innerwear market in India is expected to grow at double-digit rates over the next five years, driven by increased per capita spending and consumer demand for higher quality products, said Shweta Jalan, Managing Director and Head of India for Advent International. They see significant opportunities to create value by investing in distribution, sales and product innovation, and improving procurement and production efficiency, Jalan added.

Globally, Advent has significant investment experience in the retail, consumer and leisure industries. Over the past 27 years, the firm has invested more than $9 bn in 71 companies worldwide. Dixcy Scott, endorsed by Bollywood star Salman Khan, competes with Page Industries Ltd, the licensee for the Jockey brand in India; Rupa and Co. Ltd, the owner of MacroMan, Frontline and Euro brands; Lux Industries Ltd, the Owner of the Lux Cozi brand; and Dollar Industries Ltd, which sells brands such as Bigboss and Club in India.

The Indian underwear market is currently estimated at  Rs. 24,000 cr and the segment has grown at 15 per cent over 2010-15, according to a 2016 report by Intimate Apparel Association of India and Wazir Advisors. The underwear market is estimated to continue at the same growth rate over the next five years and is expected to become a Rs. 47,000 cr market, which is nearly 8 per cent of the total estimated apparel market, by 2020, said the report. The men’s underwear market is currently valued at around Rs. 8,500 cr. With increasing disposable income and changing consumer attitudes towards the category, the segment is expected to maintain growth to reach Rs. 16,500 cr by 2020.