Alok Inds plans to exit real estate business

MUMBAI: Alok Industries, a Rs 3,000-crore integrated textile manufacturer, is looking to exit the real estate business and offload stakes in international retail subsidiaries. With this, the Alok group plans to raise around Rs 1,200 crore, which will go towards repaying its debt in the next two years, according to a person close to the development. The group has debt of about Rs 6,600 crore on its balance sheet, as on March 2009.

The company, which is the second-largest textile exporter, intends reducing its interest cost on account of a large debt. “The company would raise about Rs 700 crore by selling real estate projects in an around Mumbai, while it may raise Rs 500 crore by diluting stakes in its UK subsidiary,” said the person.

When contacted, Dilip Jiwrajka, MD of Alok Industries, said, “We are considering options for raising funds in order to bring down the interest cost.” Without divulging any further details, Mr Jiwrajka said the company would focus more on its textile business. Alok Group has a fully-owned infrastructure subsidiary — Alok Infrastructure, which has been developing projects independently and through joint ventures. It has invested over Rs 1,700 crore and signed a deal with Peninsula Land for developing commercial real estate projects in Lower Parel.