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India:Funding textile ambitions through IPO route |
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2005-4-1
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Orient Crafts, Provogue, Creative Garments, Eastman Exports and Gokaldas Exports have two things in common. One, they are of course textile and garment exporters to major retail chains of the world and second, have taken the IPO route to fund their prospects post textile quota era which dawned this year.
The Indian textile industry has after a long lull, awakened to the exciting possibilities with the expiry of the MFA era throwing up excellent prospects of capturing at least 7 to 8 percent of the global textile trade from the present 3 to 4 percent by the year 2010.
Modernisation, technological upgradation, backward and forward linkages through valued add in the textile chain and funds to fuel all this, is the most crying need of the hour in order to make Indian industries competitive globally and carve a niche in the markets.
So far, about 10 companies are approaching primary markets with differing size of issues between Rs 100 crore and Rs 250 crore, analysts at a reputed research firm say. But, as mid and small size companies are in a consolidation mode, they will take time to join the bandwagon for taking the IPO route.
However, Gokuldas has already announced their issue, while Provogue India is to shortly file a prospectus for an IPO with the Securities and Exchange Board of India (Sebi) offering 4 million shares to the public.
Proceeds from this IPO will be used for expanding their retail chain as well as for modernizing their manufacturing plants, company officials were quoted.
Arvind Singhal, chairman of KSA Technopak, the research organisation that tracks the textiles industry said, “The big-ticket textiles exporters have traditionally been funding their expansion through internal accruals and recording a 30-40 per cent growth rate. Now, they dream of even quadrupling their growth rate, thanks to the abolition of textile export quotas. They need big money to fuel their growth plans,” he added. |
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