Alok to raise rights issue size by 50 per cent

Alok Industries, the Mumbai-based vertically integrated textile firm, has decided to increase its proposed rights issue by 50 per cent to Rs 450 crore from the earlier Rs 300 crore.

Dilip Jiwrajka, managing director, Alok Industries, told Business Standard, “There was a need and that is why we decided to increase the rights’ issue size. The present market situation is not good and we did not want to raise funds (in such times). Moreover, we found good interests from our investors for our issue.”

When asked whether the company was facing non-payment from its clients or any shortfall from other fund sources, Jiwrajka said, “There is no such case.”

Global retailers including Wal-Mart and Target are the clients of the Indian company.

Sunil Khandelwal, chief financial officer of the company, said, “We are expanding the rights issue size to around Rs 450 crore as we have got good response from investors and are confident about the next two-three years horizon.”

The company has been expanding and modernising its capacities in four phases. After the last phase, which is expected to be completed by March this year, the company plans to be among the top players in each of its sphere of operations.

Alok is into spinning, home textiles, apparel fabrics, garments and has stepped into retail too with its brand H&A. Till September last, the company had a total debt of Rs 5,916.21 crore at the gross level and a net debt of Rs 4,540.12 crore. Of these, about Rs 3,000 crore is under the Technological Upgradation Fund Scheme (TUFS).

Apart from TUFS, about Rs 1,120 crore is in the form of ECBs, FCCBs and rupee term loans. The rest Rs 1,800 crore is the working capital and medium-term debt taken for the company’s day-to-day operations.

On the BSE, the company’s share price on Thursday closed strong at Rs 19, up 6.2 per cent.