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Economic Times
10 hours ago
- Business
- Economic Times
Gokaldas Exports board clears merger proposal with BRFL Textiles
Synopsis Gokaldas Exports Ltd. has approved a merger with BRFL Textiles to create a vertically integrated apparel and textile business, offering BRFL shareholders stock or a combination of stock and cash. This move aims to enhance fabric capabilities, improve margins, and ensure consistent supply amidst challenges like increased US tariffs. iStock A year after making a strategic investment, Gokaldas Exports Ltd has approved a draft scheme to merge BRFL Textiles Pvt Ltd (BTPL) with itself to create a vertically integrated apparel and textile business. The board cleared the proposal at its meeting on Saturday. Under the scheme, BRFL Textiles shareholders will have the option to receive either 40 equity shares of Gokaldas Exports (face value Rs 5 each) for every 3,581 shares (face value Rs 10) held in BRFL, or a combination of stock and some cash wherein investors can opt to receive 30 Gokaldas shares plus Rs 8,952.50 in cash for the remaining 10 BRFL shares, the company said in a filing to the stock exchanges. The development comes at a time when Trump's 50% tariff shocker on Indian garments exports to the US has impacted the industry significantly. The two companies operate in complementary segments — Gokaldas in garment design, manufacturing and exports to leading global fashion brands, and BRFL in fabrics such as cotton, linen, viscose, polyester and blends under brands like Bombay Rayon, LinenVogue – La Classe, and Giza has been valued at Rs 552 crores for 100% of its paid up equity capital. 'The merger will help us with fabric capabilities,' said Sivaramakrishnan Ganapathi, CEO and Managing Director of Gokaldas Exports.' Fabric helps us improve margins, enable consistent fabric supply, give us faster response time to customers and in R&D in apparel innovation. Plus, we are getting a high-end capacity instead if waiting for a greenfield unit to come up. These are significant benefits.' It will consolidate resources and create economies of scale through backward integration,' the company June, Gokaldas had agreed to buy 19% of BRFL Textiles by subscribing through Optionally Convertible Debentures (OCD). In its first tranche, Gokaldas subscribed for Rs 50 crore, with the remaining OCDs worth up to Rs 300 crore subscribed subsequently in multiple tranches, depending on the funding requirements. These funds shall be utilized mainly to meet the working capital needs, with a smaller portion towards the capex requirementsBRFL was recently formed as a separate entity in August 2020 as part of a restructuring process undertaken by Bombay Rayon Fashions Limited, in which it hived-off its yarn dyeing & fabric processing units located in Tarapur, into BTPL by way of a slump sale on a going concern basis. It received investments from JM Financial Group, Think Investments among merger will result in a vertically integrated business model, enabling Gokaldas to secure a consistent and quality supply of fabrics for its garment manufacturing operations, it said. The scheme is subject to approvals from stock exchanges, the National Company Law Tribunal, shareholders and of March 31, 2025, BRFL Textiles had total assets of Rs 877.13 crore, net worth of Rs 147.57 crore and turnover of Rs 371.42 crore. Gokaldas Exports reported assets of Rs 2,763.37 crore, net worth of ?2,144.92 crore and turnover of Rs 2,476.70 crore. Its current market value is Rs 5238 crore on BSE. Shares of textile names like Gokaldas Exports Ltd., Pearl Global Ltd., Indo Count Industries Ltd., KPR Mill Ltd., Welspun Living Ltd., among others fell as much as 5% on Thursday, August 7, after US President Donald Trump signed an executive order to double the tariff rate on India to 50% from 25% earlier. On Friday, Gokaldas shares closed at ?715, down from the previous close of ?721. Year to date the stock is down 39%.Gokaldas was the first acquisition of Blackstone in India. It was turned around much later by Florintree Advisors, the investment firm of Mathew Cyriac. A widely held company, mutual funds hold 31.58% stake in Gokaldas. Foreign Institutional Investors (FIIs) hold 24.89%, Insurance companies hold around 4.73%. Major public shareholders include fund houses such as Nippon India (7.38%), SBI Magnum Children's Benefit Fund (7.20%), Goldman Sachs (5.3%), and HSBC Business Cycles Fund (4%). Currently, the promoters of the company include Clear Wealth Consultancy Services LLP that holds 8.83% stake and Gautham Madhavan who holds 0.34% stake.
Japan Times
2 days ago
- Business
- Japan Times
Indian exporters weigh options to handle U.S. levy that's 'worse than COVID'
Indian exporters who built their businesses on Americans' demand for affordable goods are redrawing their strategies and weighing alternatives to reduce the pain from U.S. President Donald Trump's shock 50% levy on imports. Trump's decision to double tariffs in the space of a week will make India-made apparels to generic drugs prohibitively expensive and can heavily disrupt exports, if not bring them to a grinding halt for many smaller businesses. "This is worse than COVID for us,' said Lalit Thukral, founder of apparel exporter Twenty Second Miles, who fears the industry will have to sell his goods at a loss and comparing the tariff-led disruption to the COVID-19 pandemic. "At least, there seemed to be an end to it. This tariff situation is just getting worse.' While escalating tariffs pose an existential threat to small enterprises like Twenty Second Miles, the larger ones are considering coping tactics including relocating production lines to countries with a lower tariff barrier, tapping buyers in other geographies and exploring acquisitions in the U.S. Gokaldas Exports, one of India's largest apparel exporters that earns about 70% of its revenue from the U.S., plans to ramp up production in its factories in Kenya and Ethiopia which face just a 10% U.S. levy. "Africa is looking like a good source at the moment,' Gokaldas' Managing Director Sivaramakrishnan Ganapathi said in an interview. "We are seeing a huge amount of inquiries for production from that region from American customers.' Gut punch The mitigating strategies will be a gut punch for Prime Minister Narendra Modi's flagship 'Make in India' initiative and puncture any prospects to position India as an alternative manufacturing hotspot to China. Economists forecast that Trump tariffs could clip India's gross domestic product by as much as 1%. Trump has peppered his tariff onslaught with jibes about how the South Asian nation's trade barriers were "obnoxious' and its economy "dead' — remarks that have drawn counter from India's central bank. But businesses are hoping for more than just retorts. Businesses thought "there would be more predictability,' according to Rohit Kumar, founding partner at public policy consultancy The Quantum Hub. "In the short term, this threatens our China+1 strategy that India was positioning itself to benefit from. In the longer term, even this rerouting may not work for longer as policies could change,' Kumar said, referring to companies trying to recast supply chains. Workers stitch garments at a factory of an apparel shop in Jaipur, India, in October 2020. Economists forecast that U.S. tariffs could clip the country's gross domestic product by as much as 1%. | REUTERS The revised U.S. levy announced as a penalty for India's purchases of Russian oil are set to take effect within 21 days, providing time for hectic parlays between New Delhi and Washington. In the meantime, companies are working on hedging strategies. Tata Group's Titan, which sells jewelry, is considering shifting some manufacturing to the Middle East which has lower duties on shipments into the U.S., it was reported Tuesday. Dire threats While Indian drugmakers are awaiting clarity on sectoral tariffs imposed by the U.S., many of them have already begun scenario planning given Trump's dire threats. "We'll be putting a initially small tariff on pharmaceuticals, but in one year — one and a half years, maximum — it's going to go to 150% and then it's going to go to 250% because we want pharmaceuticals made in our country,' Trump had said Tuesday in an interview on CNBC. Alembic Pharmaceuticals, which earns about 30% of its revenue from the U.S., sees acquisitions there as a way of boosting manufacturing in the region, its Joint Managing Director Pranav Amin said. Aurobindo Pharma, which counts on the U.S. for nearly 50% of its sales, announced the acquisition of Indiana-based Lannett on July 30 in a deal that will help expand its U.S. manufacturing footprint. About $3 billion worth of auto components exports will be affected, according to data from the Automotive Component Manufacturers Association. A 50% tariff also makes India the worse off among its peers such as Vietnam, Indonesia and China. Firms elsewhere are also actively trying to lure non-American customers to diversify their customer base and market presence. Sell elsewhere Welspun Living, which sells home fabrics in the U.S., told analysts last week that it is looking at the U.K., European Union, Middle East, Australia, New Zealand and Japan to reduce reliance on the American market. SNQS International, based in the textile hub of Tiruppur in southern India, gets about 20% of its business from the U.S. but is now looking to double down on European nations, according to its founder V. Elangovan. Larger textile manufacturers are also grabbing smaller, low-value orders to keep their factories running and avoid shutdowns, Thukral of Twenty Second Miles said. This risks crowding out the smaller firms. Calls for support Indian trade bodies across affected industries, including apparel, gems and jewelry, and shrimps, are ramping up calls of support from the Modi government. The Confederation of Indian Textile Industry wants the government to "fast track' measures to limit the hardship faced by local apparel exporters while an industry body for shrimp exporters is seeking export incentive programs. The Gems and Jewellery Export Promotion Council wants duty drawbacks, pre-shipment loans and deferring interest on working capital facilities, Chairman Kirit Bhansali said in a statement.
Fashion Network
2 days ago
- Business
- Fashion Network
Indian exporters weigh options to deal with US levy that's ‘worse than Covid'
While escalating tariffs pose an existential threat to small enterprises like Twenty Second Miles, the larger ones are considering coping tactics including relocating production lines to countries with a lower tariff barrier, tapping buyers in other geographies and exploring acquisitions in the US. Gokaldas Exports Ltd., one of India's largest apparel exporters that earns about 70% of its revenue from the US, plans to ramp up production in its factories in Kenya and Ethiopia which face just a 10% US levy. 'Africa is looking like a good source at the moment,' Gokaldas' Managing Director Sivaramakrishnan Ganapathi said in an interview. 'We are seeing a huge amount of inquiries for production from that region from American customers.' The mitigating strategies will be a gut punch for Prime Minister Narendra Modi's flagship 'Make in India' initiative and puncture any prospects to position India as an alternative manufacturing hotspot to China. Economists forecast that Trump tariffs could clip India's gross domestic product by as much as 1%. Trump has peppered his tariff onslaught with jibes about how the South Asian nation's trade barriers were 'obnoxious' and its economy 'dead' — remarks that have drawn counter from India's central bank. But businesses are hoping for more than just retorts. Businesses thought 'there would be more predictability,' according to Rohit Kumar, founding partner at public policy consultancy The Quantum Hub. 'In the short term, this threatens our China+1 strategy that India was positioning itself to benefit from. In the longer term, even this rerouting may not work for longer as policies could change,' Kumar said, referring to companies trying to recast supply chains. Analysts Chetna Kumar and Adam Farrar weighed in: 'The additional 25% oil penalty tariff would take the hit to US–bound exports to 60%, dragging GDP by 0.9%. This drop would be concentrated on the key items impacted by these tariffs such as gems and jewellery, textiles, footwear, carpets and agricultural goods — all labour-intensive industries.' The revised US levy announced as a penalty for India's purchases of Russian oil are set to take effect within 21 days, providing time for hectic parlays between New Delhi and Washington DC. In the meantime, companies are working on hedging strategies. Tata Group's Titan Ltd., which sells jewellery, is considering shifting some manufacturing to the Middle East which has lower duties on shipments into the US, Reuters reported Tuesday. Welspun Living Ltd., which sells home fabrics in the US, told analysts last week that it is looking at the UK, European Union, Middle East, Australia, New Zealand and Japan to reduce reliance on the American market. SNQS International, based in the textile hub of Tiruppur in southern India, gets about 20% of its business from the US but is now looking to double down on European nations, according to its founder V. Elangovan. Larger textile manufacturers are also grabbing smaller, low-value orders to keep their factories running and avoid shutdowns, Thukral of Twenty Second Miles said. This risks crowding out the smaller firms. Indian trade bodies across affected industries, including apparel, gems and jewellery, and shrimps, are ramping up calls of support from the Modi government. The Confederation of Indian Textile Industry wants the government to 'fast track' measures to limit the hardship faced by local apparel exporters while an industry body for shrimp exporters is seeking export incentive programs. The Gems and Jewellery Export Promotion Council wants duty drawbacks, pre-shipment loans and deferring interest on working capital facilities, Chairman Kirit Bhansali said in a statement.
Fashion Network
2 days ago
- Business
- Fashion Network
Indian exporters weigh options to deal with US levy that's ‘worse than Covid'
While escalating tariffs pose an existential threat to small enterprises like Twenty Second Miles, the larger ones are considering coping tactics including relocating production lines to countries with a lower tariff barrier, tapping buyers in other geographies and exploring acquisitions in the US. Gokaldas Exports Ltd., one of India's largest apparel exporters that earns about 70% of its revenue from the US, plans to ramp up production in its factories in Kenya and Ethiopia which face just a 10% US levy. 'Africa is looking like a good source at the moment,' Gokaldas' Managing Director Sivaramakrishnan Ganapathi said in an interview. 'We are seeing a huge amount of inquiries for production from that region from American customers.' The mitigating strategies will be a gut punch for Prime Minister Narendra Modi's flagship 'Make in India' initiative and puncture any prospects to position India as an alternative manufacturing hotspot to China. Economists forecast that Trump tariffs could clip India's gross domestic product by as much as 1%. Trump has peppered his tariff onslaught with jibes about how the South Asian nation's trade barriers were 'obnoxious' and its economy 'dead' — remarks that have drawn counter from India's central bank. But businesses are hoping for more than just retorts. Businesses thought 'there would be more predictability,' according to Rohit Kumar, founding partner at public policy consultancy The Quantum Hub. 'In the short term, this threatens our China+1 strategy that India was positioning itself to benefit from. In the longer term, even this rerouting may not work for longer as policies could change,' Kumar said, referring to companies trying to recast supply chains. Analysts Chetna Kumar and Adam Farrar weighed in: 'The additional 25% oil penalty tariff would take the hit to US–bound exports to 60%, dragging GDP by 0.9%. This drop would be concentrated on the key items impacted by these tariffs such as gems and jewellery, textiles, footwear, carpets and agricultural goods — all labour-intensive industries.' The revised US levy announced as a penalty for India's purchases of Russian oil are set to take effect within 21 days, providing time for hectic parlays between New Delhi and Washington DC. In the meantime, companies are working on hedging strategies. Tata Group's Titan Ltd., which sells jewellery, is considering shifting some manufacturing to the Middle East which has lower duties on shipments into the US, Reuters reported Tuesday. Welspun Living Ltd., which sells home fabrics in the US, told analysts last week that it is looking at the UK, European Union, Middle East, Australia, New Zealand and Japan to reduce reliance on the American market. SNQS International, based in the textile hub of Tiruppur in southern India, gets about 20% of its business from the US but is now looking to double down on European nations, according to its founder V. Elangovan. Larger textile manufacturers are also grabbing smaller, low-value orders to keep their factories running and avoid shutdowns, Thukral of Twenty Second Miles said. This risks crowding out the smaller firms. Indian trade bodies across affected industries, including apparel, gems and jewellery, and shrimps, are ramping up calls of support from the Modi government. The Confederation of Indian Textile Industry wants the government to 'fast track' measures to limit the hardship faced by local apparel exporters while an industry body for shrimp exporters is seeking export incentive programs. The Gems and Jewellery Export Promotion Council wants duty drawbacks, pre-shipment loans and deferring interest on working capital facilities, Chairman Kirit Bhansali said in a statement.
Fashion Network
2 days ago
- Business
- Fashion Network
Indian exporters weigh options to deal with US levy that's ‘worse than Covid'
While escalating tariffs pose an existential threat to small enterprises like Twenty Second Miles, the larger ones are considering coping tactics including relocating production lines to countries with a lower tariff barrier, tapping buyers in other geographies and exploring acquisitions in the US. Gokaldas Exports Ltd., one of India's largest apparel exporters that earns about 70% of its revenue from the US, plans to ramp up production in its factories in Kenya and Ethiopia which face just a 10% US levy. 'Africa is looking like a good source at the moment,' Gokaldas' Managing Director Sivaramakrishnan Ganapathi said in an interview. 'We are seeing a huge amount of inquiries for production from that region from American customers.' The mitigating strategies will be a gut punch for Prime Minister Narendra Modi's flagship 'Make in India' initiative and puncture any prospects to position India as an alternative manufacturing hotspot to China. Economists forecast that Trump tariffs could clip India's gross domestic product by as much as 1%. Trump has peppered his tariff onslaught with jibes about how the South Asian nation's trade barriers were 'obnoxious' and its economy 'dead' — remarks that have drawn counter from India's central bank. But businesses are hoping for more than just retorts. Businesses thought 'there would be more predictability,' according to Rohit Kumar, founding partner at public policy consultancy The Quantum Hub. 'In the short term, this threatens our China+1 strategy that India was positioning itself to benefit from. In the longer term, even this rerouting may not work for longer as policies could change,' Kumar said, referring to companies trying to recast supply chains. Analysts Chetna Kumar and Adam Farrar weighed in: 'The additional 25% oil penalty tariff would take the hit to US–bound exports to 60%, dragging GDP by 0.9%. This drop would be concentrated on the key items impacted by these tariffs such as gems and jewellery, textiles, footwear, carpets and agricultural goods — all labour-intensive industries.' The revised US levy announced as a penalty for India's purchases of Russian oil are set to take effect within 21 days, providing time for hectic parlays between New Delhi and Washington DC. In the meantime, companies are working on hedging strategies. Tata Group's Titan Ltd., which sells jewellery, is considering shifting some manufacturing to the Middle East which has lower duties on shipments into the US, Reuters reported Tuesday. Welspun Living Ltd., which sells home fabrics in the US, told analysts last week that it is looking at the UK, European Union, Middle East, Australia, New Zealand and Japan to reduce reliance on the American market. SNQS International, based in the textile hub of Tiruppur in southern India, gets about 20% of its business from the US but is now looking to double down on European nations, according to its founder V. Elangovan. Larger textile manufacturers are also grabbing smaller, low-value orders to keep their factories running and avoid shutdowns, Thukral of Twenty Second Miles said. This risks crowding out the smaller firms. Indian trade bodies across affected industries, including apparel, gems and jewellery, and shrimps, are ramping up calls of support from the Modi government. The Confederation of Indian Textile Industry wants the government to 'fast track' measures to limit the hardship faced by local apparel exporters while an industry body for shrimp exporters is seeking export incentive programs. The Gems and Jewellery Export Promotion Council wants duty drawbacks, pre-shipment loans and deferring interest on working capital facilities, Chairman Kirit Bhansali said in a statement.
