Gujarat based Aarnav Fashions Limited (AFL) is going to merge with 5 group companies namely, Gopi Synthetics Private Limited (GSPL), Aarnav Synthetics Private Limited (ASPL), Aarnav Textile Mills Private Limited (ATMPL), Symbolic Finance and Investment Private Limited (SFIPL) and Ankush Motor and General Finance Company Private Limited (AMGFCPL), the management announced on Saturday, January 23rd 2021.
Post-merger, AFL will be the single listed entity on the stock exchanges and the promoter holding will be around 72.47%, while the remaining 27.53% will be held by the public. As per March 2020 figures, the combined turnover and networth of all the six companies were around Rs.500.00crore and Rs.165.00 crore respectively.
The appointed date has been fixed as October 01, 2020. After this merger arrangement, Aarnav group would be one of the largest integrated textile processing houses of India located on around Ten acres of land at Ahmedabad City.
India’s textile sector is one of the oldest and important in Indian economy. The future for the Indian textiles industry looks promising withthe proposed National Technical Textile mission, national logistic policy and Scheme for Integrated Textile Parks, which will help in creating robust demand and opportunities.
The Promoter of Aarnav group, Shri ChampalalGopiram Agarwal, is with an experience of more than 40years in textile and is also president of Narol Textile Infrastructure &EnviroManagerment (NTIEM) (which is an Association of Entire Ahmedabad based Textile Processors) spoke on the occasion of announcement and said “The textile and apparel market is expected to grow to US$ 223 billion in 2021 and is fuelled by new and upcoming trends. The amalgamation will provide a stronger base, improved capital allocation and infrastructure for future growth. This in return will give enhanced value for all stakeholders including shareholders, lenders, customers and our employees. We have taken this step while Domestic textile players are getting extra export business as global brands are finding it risky to depend on China”.
As the companies to be merged have similar business operations (i.e., Processing and trading of Textile),the merger will enable significant consolidation of the business operations of all the companies into a single entity which will create a stronger listed company with larger capital and assets base resulting in availability of larger resources, improved credit rating, enhanced visibility, availability of finances on favourable terms and realize operational synergies. Over and above all these, the saving in time and cost is also the major positive factor due to such proposed merger.