AHMEDABAD, JAN 27
Gujarat-based Aarnav Fashions Limited (AFL) on Wednesday announced that it is going to merge five of its group companies with itself. The decision in this regard was taken on Saturday, said a senior official of the company.
The five companies to be merged are Gopi Synthetics Private Limited (GSPL), Aarnav Synthetics Private Limited (ASPL), Aarnav Textile Mills Private Limited (ATMPL), Symbolic Finance and Investment Private Limited (SFIPL) and Ankush Motor and General Finance Company Private Limited (AMGFCPL), he added.
Post-merger, AFL will be the single listed entity on both stock exchanges – BSE and NES – and the promoter holding will be around 72.47%, while the remaining 27.53% will be held by the public.
As per March 2020 figures, the combined turnover and networth of all the six companies were around Rs 5,00 crore and Rs 165 crore, respectively.
The appointed date has been fixed as October 1, 2020. After this merger arrangement, Aarnav group would be one of the largest integrated textile processing houses of India located on around ten acres of land in Ahmedabad.
India’s textile sector is one of the oldest and major contributors to the Indian economy. The future for the Indian textiles industry looks promising with the proposed National Technical Textile Mission, national logistic policy, and Scheme for Integrated Textile Parks, which will help in creating robust demand and opportunities.
The promoter of Aarnav Group, Champalal Gopiram Agarwal, is an industry veteran having over 40 years of experience in textile and is also president of Narol Textile Infrastructure & Enviro Management (NTIEM), an apex body of Ahmedabad-based textile processors.
Speaking with navjeevanexpress.com, Agarwal said, “The textile and apparel market is expected to grow to the US $223 billion in 2021 and is fuelled by new and upcoming trends. The merger will provide a stronger base, improved capital allocation and infrastructure for future growth. This in return will give enhanced value for all stakeholders, including shareholders, lenders, customers and our employees. We have taken this step while domestic textile players are getting more export business as global brands are finding it risky to depend on China”.
As the companies to be merged have similar business operations -processing and trading of textile – the merger will enable significant consolidation of the business operations of all the companies into a single entity which will create a stronger listed company with larger capital and assets base. This will result in the availability of larger resources, improved credit rating, enhanced visibility, availability of finances on favourable terms and realize operational synergies. Over and above all these, the saving in time and cost is also the major positive factor due to such proposed merger.
