Gokaldas Exports dips 4% after 13% equity changes hands via block deal

Shares of Gokaldas Exports dipped 4 per cent to Rs 390 on the National Stock Exchange (NSE) in Thursday's intra-day trade after over 10 per cent equity of THE garments & apparels company changed hands via block deal.

Till 09:23 AM, roughly 8.15 million equity shares, representing 13.5 per cent of the total equity of Gokaldas Exports, had changed hands on the NSE, the exchange data shows. The names of the buyers and sellers could not be ascertained immediately.

That said, as per a report, private equity (PE) firm, Clear Wealth Consultancy Svcs LLP was looking to sell 8.25 per cent stake via block deal in Gokaldas Exports today. The block deal size is of nearly Rs 234 crore.

As on December 2022, Clear Wealth Consultancy Svcs LLP, the promoter of Gokaldas Exports, held 12.46 million shares or 20.56 per cent stake in the company, the shareholding pattern data shows.

However, despite today’s fall, the stock has outperformed the market in the past one month by surging 9 per cent, as compared to 1 per cent decline in the Nifty 50.

Gokaldas Exports is one of India's leading apparel exporters with an annual capacity of over 36 million pieces. Gokaldas focuses on manufacturing complex garmenting products that insulate it from other price based competition.

The company has impressive clientele of leading international brands with 'GAP' and 'H&M' being major contributor to revenues. US contributes nearly 80 per cent of sales.

"With the recent fundraise (QIP: Rs 300 crore), the company has strengthened its balance sheet with repayment of about Rs 300 crore debt, post which Gokaldas Exports has become net debt free (net cash surplus: Rs 369 crore). The enhanced government focus on apparel exports and China +1 strategy of global brands provide long term growth opportunity for players like Gokaldas Exports," analysts at ICICI Securities had said in its December quarter result update.

The company's management indicated Q4FY23 will see sequential growth, and H2FY24 will be better than H1FY24.

During Q3FY23, several players in spinning pointed to enhancement in demand on the back of China opening up. A few textile companies did indicate that some retailers have seen higher demand with reduction in inventory.

Analysts at Emkay Global Financial Services, meanwhile, believe that while the textile sector is facing tough times, there are some signs of improvement. "Although muted demand from the USA and UK remains a key concern, correction in domestic cotton price, expanding yarn-cotton spread, initiation of demand from some retailers, better demand from China, and lowering of premium of domestic cotton over international cotton prices are key positives," the brokerage firm said in textile sector update.