Gokaldas Exports to invest Rs 350 crore in BRFL Textiles

Gokaldas Exports has announced an investment plan in fabric manufacturer BRFL Textiles Pvt Ltd (BTPL). The company will invest up to Rs 350 crore by subscribing through optionally convertible debentures (OCDs).

The first tranche will see an investment of Rs 50 crore, with the remaining Rs 300 crore to be subscribed in multiple tranches based on funding requirements. The strategic move is intended to help Gokaldas Exports meet its raw material needs more efficiently.

Purpose of fundraising

The funds from this investment will be primarily used to meet the working capital needs of BRFL Textiles, with a smaller portion allocated towards capital expenditure requirements.

This will enable BTPL to enhance its infrastructure and maintain its competitive edge in the fabric processing segment. "Investment in BRFL Textiles will help Gokaldas Exports become self-reliant in meeting its raw material needs for manufacturing," the company said in a statement.

Aiming for an end-to-end supplier model

Gokaldas Exports aims to create an end-to-end supplier model through its investment in BTPL, turning it into a self-reliant entity in terms of raw material sourcing.

BTPL specializes in prints and yarn-dyed fabrics, which align perfectly with Gokaldas Exports' internal requirements for knits, wovens, and all fiber types. "With the strategic investment in BTPL, we intend to stand largely self-reliant in fulfilling our raw material requirements for manufacturing," Gokaldas Exports stated.

The investment in a fabric processing mill is considered an important strategic step for Gokaldas Exports. The infrastructure of BTPL includes world-class machinery and expertise in linen manufacturing.

Gokaldas Exports believes this investment will provide a significant competitive advantage by integrating backwards into sourcing high-quality fabric at competitive prices. This move is expected to accelerate the company's growth and strengthen its position in the global market.

Gokaldas Exports logged a consolidated profit after tax of Rs 44.3 crore and a total income of Rs 818 crore for the quarter ended March 31, 2024. On the other hand, BRFL Textiles reported a revenue of Rs 473.88 crore in FY 2023-2024.