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Inida:Citigroup equity arm picks 7% stake
in textile major Abhishek Ind |
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2005-3-3
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In a deal worth about $10.3 million, a private equity arm of Citigroup purchased 7 percent stake in Indian textiles and apparel maker Abhishek on Tuesday, sources said.
The move jacked up the company stock by nearly 10 percent on the news.
Though confirmation is yet to come from officials at Citigroup and Abhishek Industries Ltd., however, the Bombay Stock Exchange trade data showed a block transaction for 13.6 million shares at 33.10 rupees.
The Citi group equity company would pay about 450 million rupees ($10.3 million), or about 33 rupees a share, for the stake that was sold by the company''s founders. ICICI Securities are the sole financial advisor for the transaction.
With the textile industry having witnessed the first the expiry of textile and garment quotas and followed up with textile sector friendly budget, thanks to Finance Minister P Chidambaran, investors are lapping up textile company shares like never before.
Although China is expected to corner half of all U.S. clothing imports, up from 15 percent in 2002, experts rate India''s chances high at picking up 6 percent of it as the global share of textile industry standing at $400 billion.
Huge investment to the tune of Rs 1.4 trillion will be required over the next five to six years, just to keep pace with the demand, say analysts.
The deal, which values the company at 6.4 billion rupees, drove Abhishek shares up as much as 9.5 percent to 35.60 rupees in a weak Bombay exchange.
Other textile and garment majors in India like Arvind Mills Ltd. and Raymond India Ltd., and niche players such as Welspun India Ltd set up ambitious expansion plans and raised their production capacities in views of the changed global textile and clothing scenario to get the piece of action. |
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