Startup Deep Dive : Rare Rabbit — revenue neared Rs 850 crore while profit shrank to Rs 16 crore

Radhamani Textiles Private Limited, the company behind the menswear label Rare Rabbit, more than doubled its net profit to ₹72.1 crore (~$7.5 million) in FY2024, according to a credit rating rationale that ICRA published in June 2025. A year later, on revenue that had grown further, that profit had collapsed to roughly ₹16 crore. Nothing had gone wrong with sales.

The company had simply chosen to spend the money. Advertising costs jumped to ₹118.7 crore and employee costs to ₹134.7 crore, largely to launch a new kids-wear line, according to Startuppedia’s report on the FY2025 filings and ICRA’s own note on the margin decline. It is an unusual choice for a business that spent sixteen years, from its 2008 incorporation to 2024, without taking a single rupee of outside equity. This is the story of how a family textile manufacturer in Bengaluru built a ₹800-crore-plus fashion house on bank loans and internal cash, waved off one billion-rupee suitor, and then let its own profit fall on purpose.

Quick facts

What they do

Rare Rabbit is a premium fashion brand that sells shirts, trousers, jackets and accessories to young, urban Indian men, priced well above mass-market labels but below international luxury, at roughly $20 to $80 a piece according to Reuters’ reporting carried by theprint.in in December 2023. It is one of three brands under Radhamani Textiles’ “House of Rare” umbrella, alongside the women’s line Rareism and the newer kids’ line Rare Ones, sold through a pan-India network of company-run exclusive brand outlets, multi-brand retail counters, its own e-commerce site, and third-party marketplaces such as Myntra, Flipkart and Ajio. The company itself, on its own website, describes the group as targeting “the entire family” with products it says are manufactured in India.

The origin

The origin story here is not a garage start-up but a manufacturer’s pivot. Radhamani Textiles Private Limited was incorporated in 2008 and began commercial operations in April 2011, according to ICRA’s account of the company. For its first years, it worked as a contract manufacturer, making apparel for other people’s labels rather than its own. That changed in 2015, when the company, led by Manish Poddar and his wife Akshika Poddar, decided to stop making clothes for other brands and start selling its own: Rare Rabbit was born as the flagship of a new “House of Rare” retail business, betting that a manufacturer’s understanding of production and fit could be turned into a design-led label that could sit above the country’s traditional menswear chains. Nearly a decade later, that first brand still accounts for around 85% of the group’s revenue, according to ICRA’s June 2025 rationale, even as the company has since added women’s and children’s lines to diversify away from it.

The struggle years

The first strain on this business was not a bad quarter but a long absence: for sixteen years, from incorporation in 2008 through to 2024, Radhamani Textiles ran without a single institutional equity investor, financing an inventory-heavy apparel business purely on promoter capital and bank credit lines. That is an unusually long stretch for a company operating in a sector ICRA itself describes as working-capital intensive, with inventory held for 170 to 200 days at a time over the past two years. When outside money finally came looking, the first serious offer did not survive due diligence: in December 2023, Tata Capital issued a term sheet to invest up to $40 million for around a 13% stake at a $300 million valuation, according to Reuters’ reporting via theprint.in, with due diligence under way by January 2024 per fashionvaluechain.com. Tata Capital and Rare Rabbit both declined to comment on the talks, and the deal never closed; the private equity firm A91 Partners, which had been competing for the same stake, won the mandate instead roughly six months later.

The second strain arrived just as the company should have been celebrating. Nine months into FY2025, profit after tax stood at ₹39.4 crore, an annualised margin of 6.3% of operating income, already roughly half the 11.3% margin the company had posted for all of FY2024, according to ICRA’s June 2025 rationale, which attributed the 630 basis point year-on-year fall in the nine months to December 2024 to higher employee costs and advertising spend tied to the new kids-wear brand. By the close of the full year, net profit had fallen further still, to about ₹16 crore, a decline of roughly 60% from FY2024’s ₹72.1 crore, as advertising costs rose to ₹118.7 crore and employee costs to ₹134.7 crore, according to Startuppedia’s report on the filed accounts.

The turning point

The hinge moment was not the Tata Capital talks themselves but what came after they fell away. Before any institutional money arrived, FY2023 revenue stood at ₹376.3 crore and net profit at ₹30.7 crore, funded entirely by promoter equity and bank facilities, per ICRA’s audited figures. Then, across two tranches in FY2025, Radhamani Textiles raised ₹200 crore from five private equity investors through compulsorily convertible preference shares, its first-ever external fundraising: roughly ₹150 crore (about $18 million) in June 2024 led by A91 Partners alongside Nikhil Kamath-backed NKSquared, Gruhas, and the family trusts of Manyavar founder Ravi Modi and Vedant Modi, according to Entrackr’s reporting at the time, followed by a further ₹50 crore from A91 Partners in February 2025 at a broadly flat valuation, per India Entrepreneur’s report. On the other side of that transaction, FY2024 revenue had already reached ₹637.1 crore, up 69% year on year, with profit up 135% to ₹72.1 crore (ICRA, June 2025). By June 2025, the company carried its first formal credit rating, [ICRA]A (Stable) on its long-term bank lines and [ICRA]A2+ on its short-term facilities, against ₹200 crore of rated bank exposure — a company that had spent a decade and a half answering only to its own bankers now had outside shareholders, a rating agency, and a much larger balance sheet to manage all at once.

How it makes money

• Manufacturing is deliberately asset-light: about 90% of production is outsourced and only 10% made in-house, which keeps fixed capital low and supports margins (ICRA, June 2025).
• Most exclusive brand outlets sit on rented premises rather than owned real estate, again trading fixed-cost commitment for flexibility (ICRA, June 2025).
• Revenue is split roughly 42% from exclusive brand outlets, 33% from online channels (its own site plus marketplaces such as Myntra, Flipkart and Ajio), and the balance from multi-brand outlets and other channels, as of February 2025 (ICRA, June 2025).
• Pricing sits above mass-market Indian menswear (Raymond, Louis Philippe, Peter England) but below international fast fashion and luxury, at roughly $20-$80 per item (Reuters via theprint.in, December 2023).
• The part people tend to get wrong: this reads like a digital-first D2C label, but only about a third of revenue is online — the majority still comes through the company’s own physical stores, and growth plans (around 45 new outlets a year) lean further into that channel, not away from it (ICRA, June 2025).

The numbers

Revenue has compounded fast; profit has not kept pace in the most recent year. Figures below are standalone, in ₹ crore, as reported.

• Operating margin (OPBDIT/OI) rose from 13.1% in FY2023 to 18.6% in FY2024, then fell to 12.3% on an annualised basis in the nine months to December 2024 (ICRA, June 2025).
• Net margin followed the same arc: 8.2% in FY2023, 11.3% in FY2024, and 6.3% annualised in 9M FY2025 (ICRA, June 2025).
• Total debt/OPBDIT improved from 1.6x in FY2023 to 1.1x in FY2024 and stood at 1.2x as of December 2024; interest coverage rose from 9.6x to 13.6x over the same period (ICRA, June 2025).
• Free cash and liquid investments stood at approximately ₹15 crore as of March 2025, against an unutilised working-capital limit of ₹119 crore out of a sanctioned ₹184 crore (ICRA, June 2025).

ICRA’s own estimate of FY2025 revenue (~₹850 crore) and the figure Startuppedia reports from the filed accounts (₹818.67 crore) differ slightly, most likely because one is a pre-audit estimate and the other reflects the filed statutory numbers; both agree the business grew roughly a third year on year and that profit fell sharply in the same period.

Where the money comes from

• Segment: Rare Rabbit menswear alone still contributes around 85% of group revenue, nearly a decade after the launch of the women’s brand Rareism and years after the newer Rare Ones kids’ line (ICRA, June 2025) — the diversification is real, but the numbers have not caught up with the pitch.
• Channel: exclusive brand outlets contribute 42% of revenue, online channels 33%, and multi-brand outlets and other routes the remaining roughly 25%, as of February 2025 (ICRA, June 2025).
• Footprint: the retail network comprised 157 exclusive brand outlets and 817 multi-brand outlet counters as of February 2025, up from 90 retail outlets as recently as December 2023, according to Reuters’ reporting via theprint.in — a near doubling of the exclusive-outlet count within about fourteen months.
• Geography: the company describes itself as having a pan-India distribution network, and its stated expansion plan of roughly 45 new stores a year is weighted toward tier-I and tier-II cities rather than the metros where it first grew (ICRA, June 2025).
• The surprise: a brand that built its early identity around e-commerce is now, by revenue, mostly a physical retail chain — and it is doubling down on that model with a three-year, roughly ₹130 crore store-expansion capital plan (ICRA, June 2025).

The risks

• Working-capital and inventory risk: net working capital stood at 40.6% of operating income as of December 2024, with inventory held for 170-200 days over the past two years — a long holding period that leaves the company exposed to markdowns and write-offs if fashion trends turn faster than stock can be sold through, a risk ICRA flags explicitly as store additions continue (ICRA, June 2025).
• Concentration in one segment: with roughly 85% of revenue still tied to men’s wear, any slowdown specific to that category, or a misstep in Rare Rabbit’s own design cycle, would hit the group disproportionately, despite years of investment in Rareism and Rare Ones aimed at spreading that risk (ICRA, June 2025).
• Competitive and demand sensitivity: the Indian apparel retail market is, in ICRA’s own words, highly fragmented, with aggressive expansion from both domestic branded players and international fast-fashion chains; the business is also directly exposed to any broader slowdown in discretionary consumer spending, which would hit a premium-priced label before it hit mass-market rivals (ICRA, June 2025).

The takeaway

The lesson here is not about fashion. It is about what a single year’s profit number actually tells you. Radhamani Textiles took profit from ₹30.7 crore to ₹72.1 crore in one year and looked, briefly, like a business getting more efficient as it scaled. The following year it chose to cut that profit by roughly 60%, not because anything broke, but because it decided a kids’ brand launch and a bigger advertising budget were worth more than the number on the bottom line. Both were real choices made by the same management team with the same underlying business. A rating agency, reading the working-capital cycle and the debt-coverage ratios rather than the headline profit line, still came away comfortable enough to assign its first formal rating in the same year profit fell. The number that mattered was not how much money the company kept, but how well it could still service what it owed while choosing to spend the rest on growth.

Frequently asked questions

Who owns Rare Rabbit?

Rare Rabbit is a brand of Radhamani Textiles Private Limited, founded by Manish Poddar and Akshika Poddar and headquartered in Bengaluru. Following its FY2025 fundraising, private equity investors including A91 Partners, NKSquared, Gruhas and the Ravi Modi family trust hold 21% of the company on a fully diluted basis, with the Poddars retaining the remainder (ICRA, June 2025).

How much funding has Rare Rabbit raised?

Radhamani Textiles raised roughly ₹200 crore (about $24 million at the time) from five private equity investors across two tranches in FY2025 — around ₹150 crore in June 2024 and a further ₹50 crore in February 2025, both led by A91 Partners — marking its first-ever institutional equity round after sixteen years of being funded solely through promoter capital and bank credit (Entrackr, 2024-25; ICRA, June 2025).

What is Rare Rabbit’s current valuation?

Reported figures place the valuation at roughly $279-283 million (about ₹2,200-2,350 crore) after the February 2025 round, per Entrackr’s and India Entrepreneur’s reporting. Tata Capital had separately explored investing at a $300 million valuation in December 2023, but that deal did not go through.

Is Rare Rabbit profitable?

Yes, but its profit has swung sharply. Net profit rose from ₹30.7 crore in FY2023 to an audited ₹72.1 crore in FY2024, then fell to roughly ₹16 crore in FY2025 as advertising and employee costs rose to fund a new kids-wear brand, according to ICRA’s June 2025 rationale and Startuppedia’s reporting on the filed accounts.

Is Rare Rabbit a listed company?

No. It remains privately held. The compulsorily convertible preference shares issued to its FY2025 investors carry a provision for conversion around a future initial public offering, but no IPO process has been publicly announced (ICRA, June 2025).

Sources

Figures are as of September 2026. Currency converted at $1 ≈ ₹96.0 as of 18 September 2026 (Trading Economics).

• ICRA, “Radhamani Textiles Private Limited: [ICRA]A (Stable)/[ICRA]A2+; Assigned,” rating rationale, June 2025
• Entrackr, “Rare Rabbit nears Rs 650 Cr revenue in FY24, profit surges 2.3X,” 2025
• Entrackr, “Exclusive: A91 Partners backs Rare Rabbit in new round,” February 2025
• Entrackr, “Rare Rabbit raises $18 Mn from A91 Partners, Zerodha founders’ fund, others,” June 2024
• Inc42, “Rare Rabbit’s FY24 Profit Doubles To INR 75 Cr,” 2025
• Inc42, “Rare Rabbit Posts INR 32 Cr Profit In FY23, Sales Cross INR 350 Cr Mark,” 2023
• India Entrepreneur, “Rare Rabbit Secures INR 50 Cr Investment from A91 Partners at USD 279 Mn Valuation,” February 2025
• Reuters, via ThePrint.in, “India’s Tata Capital eyes fashion brand Rare Rabbit at $300 million valuation -sources,” December 2023
• FashionValueChain.com, “Tata Capital Explores Investment in Rare Rabbit, Eyes 13% Stake in $300 Million Valuation,” January 2024
• SiliconIndia, “Rare Rabbit closes Rs. 500 crore worth funding round led by A91 Partners,” 2024
• Startuppedia, “Founded in 2015 By a Husband-Wife Duo, Fashion Brand The House of Rare Clocks Rs 818 Crore Revenue in FY25; Profit Falls to Rs 16 Crore,” 2025
• Behind The Feature (Substack), “Rare Rabbit made ₹75 crore in profit, then cut it to ₹16 crore on purpose,” 2025
• The House of Rare, company website, “About Us”
• Trading Economics, USD/INR exchange rate, 18 September 2026

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