Economy

India's largest denim manufacturer Arvind Ltd to demerge apparel and engineering business

India's largest denim manufacturer Arvind Ltd to demerge apparel and engineering business”

The company board has approved demerger of branded apparel business to Arvind Fashions and demerger of engineering division to Anveshan. "The second quarter turned out to be another challenging quarter for the industry with GST implementation impacting out domestic textile business", Sanjay Lalbhai said in a statement.

Shareholders of Arvind Ltd will get five shares of Arvind Fashions for each share of the parent company, and 27 shares of Anup Engineering for each of the parent firm, Arvind director and chief financial officer Jayesh Shah said. Similarly, the engineering business will be demerged into Anup Engineering.

"Arvind Anveshan and Arvind Fashions will be listed on both the bourses, NSE and BSE, by July or August 2018". The textiles business aspires to reach a revenue of Rs 10,000 crore in the next 5-6 years period, he said. The company said that its apparel business is poised to grow faster and it will put in Rs 1,500 crore to transform the category.

Arvind has earmarked Rs1,500 crore for the textiles business over the next three fiscal years. "We will do this by focusing on engines of growth and transformation namely - vertical integration, becoming an end-to-end solution provider and strategic supply chain partner to the world's most successful brands and retail concepts", Lalbhai said.

It will also look at next generation products and advanced materials where the plan is to venture into segments such as human protection, industrial process, infrastructure and transportation.

The branded apparel business - which has a growing portfolio of global brands including US Polo, Tommy Hilfiger, Gap and Nautica, as well as Arvind's own value brand "Unlimited" and posted revenues of nearly ₹2,900 crore in FY17 - will be spun off into Arvind Fashions.

The branded apparel business - which includes inhouse brands like Flying Machine, Newport and Excalibur and global brands like US Polo, Tommy Hilfiger, GAP and Nautica - will be spun off into Arvind Fashions. Anup has demonstrated an impeccable trajectory on customer delight, topline growth and profitability. "Financial independence will help unlock the full potential of these businesses".



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