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India's Gokaldas Exports announces tie-up with BRFL textiles

22 Jun '24

2 min read

India's Gokaldas Exports announces tie-up with BRFL textiles

Pic: Gokaldas Exports

Insights

Gokaldas Exports will invest in BRFL Textiles Private Limited via Optionally Convertible Debentures, with up to ₹300 crore ($36 million) more in tranches.
This investment supports working capital and capex needs, with a potential merger by 30th June 2025.
It aims to make GEX self-reliant in raw materials, leveraging BTPL's advanced fabric processing capabilities for

Gokaldas Exports (GEX) has agreed to invest in BRFL Textiles Private Limited (BTPL) by subscribing through Optionally Convertible Debentures (OCD). In its first tranche, GEX will subscribe for ₹50 crores (~$6 million), with the remaining OCDs worth up to ₹300 crores (~$36 million) to be subscribed subsequently in multiple tranches, depending on the funding requirements. These funds shall be utilized mainly to meet the working capital needs, with a smaller portion towards the capex requirements. Further, subject to the fulfilment of certain conditions and receipt of applicable regulatory, statutory, or other required approvals/consents, a possible merger or acquisition will be explored by 30th June 2025.

In the present business environment, customers require speed, flexibility, and agility and prefer to associate with suppliers who operate with an end-to-end integrated business model. With the strategic investment in BTPL, we intend to stand largely self-reliant in fulfilling our raw material requirements for manufacturing. BTPL comes with excellent infrastructure in terms of machinery and configurations, world-class machinery, and specialisation in linen manufacturing. It is well known in the fabric processing segment and has specialized prints and yarn-dyed fabrics that are synergistic with our internal needs. The infrastructure supports the production of knits, wovens, and all fibre types.

We believe that investment in BTPL would accelerate GEX’s growth, leveraging the unique capabilities of BTPL. At this point, investment in a fabric processing mill would play an important strategic step for the company.