Income tax raids on Pothys’ premises in Tamil Nadu
Official sources confirmed that the searches are underway at over 25 locations across the state, targeting showrooms and related properties in cities including Chennai, Coimbatore, Madurai, and Tirunelveli
The Income Tax Department on Friday (September 12) launched raids on premises linked to Pothys Private Limited, one of Tamil Nadu’s largest textile and jewelry retail chains, as part of an investigation into alleged tax evasion.
Official sources confirmed that the searches are underway at over 25 locations across the state, targeting showrooms and related properties in cities including Chennai, Coimbatore, Madurai, and Tirunelveli.
Not first time
This is not the first instance of Pothys facing Income Tax scrutiny. In October 2016, the department searched nine locations, including showrooms in Chennai, Coimbatore, and Puducherry, following the seizure of Rs 1 crore in unaccounted cash from two Pothys employees in Puducherry.
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An official noted at the time that the employees could not explain the source of the cash, prompting raids during the enforcement of the model code of conduct for a bypoll.
Tamil Nadu’s retail giants have faced similar probes, such as the 2019 raids on Saravana Stores and the 2020 searches of the Chettinad Group, which uncovered tax evasion worth Rs 700 crore. In 2021, raids on two Tamil Nadu-based retail groups revealed suppressed sales exceeding Rs 1,000 crore and unaccounted cash purchases of Rs 150 crore in textiles and jewelry.
No response from Pothys
Pothys officials have not responded to requests for comment, and the Income Tax Department has stated that further details will be released upon completion of the searches.
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The raids come at a critical time for Pothys, as its planned IPO aims to leverage its brand equity and the cultural significance of sarees, which remain a core product in South India, driven by high repeat purchases during festivals and weddings.
Founded in 1923 by KV Pothy Moothan in Srivilliputhur, Tamil Nadu, Pothys began as a small weaving and trading business and has grown into a retail giant renowned for its extensive collection of silk sarees, traditional apparel, and, since 2021, gold and diamond jewelry through its Swarna Mahal subsidiary. With flagship stores in Chennai’s T. Nagar and Anna Nagar, and outlets across Tamil Nadu, Kerala, and Karnataka, Pothys holds a significant market presence, earning ISO 9001 certification in 2003 for retail excellence.
The company is also preparing for a Rs 1,200 crore initial public offering (IPO) within the next six to eight months, aiming to expand its store network, strengthen supply chains, and boost online sales, capitalizing on the growing demand for ethnic wear.
This IPO is part of a broader trend among South Indian saree retailers, including RSB Retail, Marri Retail, and Nalli Silk Sarees, which collectively plan to raise Rs 20,000 crore through public listings to tap into consumption-led growth in the sector.
