Gujarat based Aarnav
Fashions Limited (AFL) is going to merge with 5 group companies namely, 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), the management announced recently.
Post-merger, AFL will
be the single listed entity on the stock exchanges and the promoter holding
will be around 72.47 per cent, while the remaining 27.53 per cent will be held
by the public. As per March 2020 figures, the combined turnover and networth of
all the six companies were around Rs 500.00 crore and Rs 165.00 crore
respectively.
The appointed date
has been fixed as October 01, 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 important in 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, with an experience of more than 40
years in textile and is also president of Narol Textile Infrastructure and
Enviro Management (NTIEM) (which is an Association of Entire Ahmedabad based
Textile Processors) spoke on the occasion of announcement and said “The textile
and apparel market is expected to grow to US$ 223 billion in 2021 and is
fuelled by new and upcoming trends. The amalgamation 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 extra export business as global brands are finding
it risky to depend on Chinaâ€Â.
As the companies to
be merged have similar business operations (i.e., 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 resulting in 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.