Mandhana eyes acquisition, to enter spinning segment

Leading textile player Mandhana Industries is eyeing a domestic acquisition in the spinning segment for up to Rs 100-crore and has appointed Edelweiss as its merchant banker to conduct due diligence on target companies.

"We are looking at an acquisition in the spinning segment, where we do not have a presence. We are looking at a spinning mill, preferably in Maharashtra, with a capacity of around 50,000-60,000 spindles and a turnover of around Rs 75-100-crore," Mandhana Industries' Managing Director, Manish Mandhana, told PTI here.

The company, which is listed at both the BSE and NSE, has already got a few offers and is presently evaluating them, he said.

The company that is also planning an organic expansion involving a capex of Rs 280-crore, will fund the acquisition through internal accruals and debt.

"We don't intend to raise any funds immediately. We will fund our inorganic growth partly through internal accruals and partly through debt," Mandhana said.

An earlier attempt to acquire a spinning mill did not frutify, he said, without divulging any further details.

On the company's expansion plans, he said that it would set up two garment manufacturing facilities in Maharashtra - in Tarapur and Baramati. Both the units will have a production capacity of 4-million pieces per annum each and will be operational by March and October 2011, respectively.

Besides, the company plans to double the capacity of its Tarapur weaving unit from the present 18-million metres to 36-million metres of yarn by May next, Mandhana said.

The company is in the midst of fine-tuning its strategy for a retail foray early next year when it plans to enter the business by launching 10 branded stores (by end-March).

Upbeat on its retail play, Mandhana said he expects a 100 per cent growth YoY over the next three-years in the business.

The company is eyeing a topline of around Rs 800-crore this fiscal as against Rs 625-crore in the year-ago period, while its bottomline is expected to grow to Rs 65-crore from last fiscal's Rs 48-crore, he said.