Shares of Alok Industries, a textiles manufacturer, were locked in the 20% upper circuit limit in today’s trade at ₹25.9 apiece. This remarkable spike in shares came after Reliance Industries invested ₹3,300 crore in the company by subscribing to preferential shares, the company said in today’s regulatory filing.
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The company’s board in November approved the issue of preference shares to Reliance Industries at a dividend rate of 9% on a private placement basis. These preference shares will be redeemable at par at any time at the company’s option within a period not exceeding 20 years from the date of allotment, according to the company.
About Alok Industries
Established in 1986, Alok Industries is an integrated textile manufacturer headquartered in Mumbai. It has a strong presence in both the cotton and polyester segments. In the cotton segment, the company is integrated from spinning to weaving, processing, finished fabrics, bedsheets, towels, and garments.
In polyester too, the company is fully integrated, starting from a continuous polymerization plant to the production of chips, POY, FDY, DTY, and PSF.
The company has a large customer base comprising of domestic and overseas retailers, brands, and garment exporters in India and converter countries (countries that primarily do garment manufacturing, like Bangladesh, Vietnam, and Sri Lanka), who are vendors to major international labels.
In 2020, Reliance Industries, jointly with JM Financial Asset Reconstruction, successfully acquired Alok Industries through the insolvency and bankruptcy law auction conducted by lenders seeking to recover unpaid loans. RIL held 40% of the company at the end of September 30, 2023, while JM Financial ARC held a 34.99% stake in the company.
Alok Industries Financials
For the September quarter, the company reported a net loss of ₹175 crore, an improvement over Q2 FY23’s loss of ₹192 crore and a ₹226 crore loss in Q1FY24. The company’s operating profit improved 200% QoQ to ₹36 crore in Q2FY24.
Indian textile manufacturers are in a sweet spot as textile and apparel exports experienced rapid growth in recent years, with global buyers seeking alternatives to China.
Disclaimer: We advise investors to check with certified experts before taking any investment decisions.Abou
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Published: 02 Jan 2024, 06:15 PM IST
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