Gokaldas to invest Rs 300 Cr in Maharashtra fabric unit ahead of possible buyout

Bengaluru-headquartered apparel exporter Gokaldas Exports Ltd (GEX) on Thursday announced a strategic tie-up with BRFL Textiles, a fabric processing company with a large single-location plant in Tarapur Maharashtra. The tie-up involves GEX investing up to Rs 300 crore in BRFL in tranches, starting with Rs 50 crore, with a possible merger of the two companies, to be explored one year from now.

This is the third such investment by GEX, since it acquired Dubai based Atraco Group in August 2023, and Matrix Design and Industries Pvt Ltd in February 2024. GEX has also raised Rs 400 crore through a QIP issue in April 2024.

GEX has now agreed to invest in BRFL Textiles by subscribing through Optionally Convertible Debentures (OCD). In its first tranche, GEX will subscribe to OCDs worth Rs 50 crore, and subscribe the remaining OCDs worth up to Rs 300 crore in multiple tranches, later, depending on the funding requirements, the company said in a media statement.


These funds would be utilized mainly to meet the working capital needs, with a smaller portion towards the capex requirements. The company may explore buying it out by June 30 subject to fulfilment of certain conditions and regulatory approvals, the company said.
Gokaldas vice chairman and managing director Siva Ganapathi told ET: “With the strategic investment in BRFL Textiles, we intend to make ourselves more self-reliant in fulfilling our raw material requirements for manufacturing. We believe that investment in BRFL Textiles would accelerate GEX’s growth, leveraging the unique capabilities of BRFL. It is an important strategic step for the company."

The GEX stock moved up by more than 4% on the exchanges post the announcement, closing at Rs 865.90, with market capitalization at Rs 6163 crore.

BRFL 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, the statement said.