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GHCL on Sunday has completed the divestment of its Home Textile business to Indo Count Industries, a leading manufacturer and exporter of Home Textiles, for a total consideration of ₹608. 30 crore. With this acquisition, Indo Count becomes the largest global home textile bedding manufacturer.
The completion of the divestment is effective from April 2, 2022.
In a statement, GHCL said that the total consideration for divestment of the Home Textiles Business has been calculated at ₹608.30 crores (subject to validation of customary closing date adjustment of working capital in terms of the definitive agreements).
RS Jalan, Managing Director, GHCL Ltd., said, “The divestment of the Home Textiles business is a strategic move which we believe will unlock value for all our stakeholders. We have been able to complete the process seamlessly, on time and with all relevant approvals in place. The proceeds from this divestment will further GHCL’s growth strategy based on our vision to “Grow our Business Responsibly, with Governance, Sustainability and Core Values as our Foundation.”
Anil Kumar Jain, Executive Chairman, said, “We are extremely happy to announce the completion of the acquisition and warmly welcome the new team to the Indo Count family. We are confident that this foray will successfully meet our long-term aspirations and create value for our global customers and all stakeholders,” adding, “We are excited about the pace at which we are progressing towards strengthening our brand into an end-to-end bedding solution provider for Global & Domestic markets.”
“We believe this is a significant step towards our strategic vision of achieving a formidable leadership position in the Home Textile Bedding business ‘globally’. Further, with the increasing growth potential in the Indian Home Textile industry, we believe we are market-ready to capitalize on this opportunity,” the Indo Count Executive Chairman added.
Here’s how this acquisition will catapult Indo Count to a leadership position in the Global Home Textiles Bedding segment as per the regulatory filing:
1. Indo Count becomes the world’s largest Home Textile bedding manufacturer, with an annual capacity of 153 million meters.
2. Potential addition of ~ ₹1,300 – 1,500 crore per annum to the topline of the Company at peak capacity.
3. Indo Count adds a whole new avenue of customer base which is untapped, thereby leading to a gain in global market share.
4. Current customers of GHCL Home Textile business will gain access to ICIL’s full product portfolio consisting of fashion, utility, and institutional bedding.
5. Increase market share by enhancing capacity utilization, creating synergies, and expanding product range offerings.
6. The customer-centric approach will enable ICIL to be more flexible and strengthen customer service levels resulting in a strong Global Supplier and Brand in the Home Textile Industry.
Meanwhile, this move will enable the GHCL management to focus on the strategic growth pillars of the Chemical and Spinning businesses.
GHCL plans to utilize the proceeds of the sale to further initiatives such as the Greenfield project, product basket expansion, clean energy and ESG initiatives, automation, and exploring opportunities to enter into JVs.
Last week, on Friday, GHCL shares settled at ₹578.25 apiece up by ₹30.35 or 5.54%, while the Indo Count shares closed at ₹169.20 apiece up by ₹10 or 6.28% on BSE.
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