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Textile companies to increase finances to fund expansion
 
Textile companies to increase finances to fund expansion
The booming capital markets in 2005 lured many a textile firm to raise finances to fund their rapid expansions.Prithvi Haldea, M.D ,Prime Database,the New Delhi-based firm tracking primary markets,says the boom in the Rs 35,000 crore retail sector is spawning the demand for more ready to wears and fuelling the need to expand capacities.He further added "A number of these firms also hold considerable land assets which can be developed.The infrastructure boom is aiding these companies to raise capital for this purpose as well."As many as 12 companies have already announced their intention of turning to the capital market to fund their business activities.

These include names like Orient Craft,one of Indias largest apparel exporters and Kewal Kiran ,owner of brands like Killer and Lawman Jeans.The textile sector has seen capital investments close to Rs 30,000 crore since 00,and it is expected that nearly Rs 16,000 crore will be raised through institutional and public equity investments over the next five years to meet the rising export demand.But while the sector is vibrant with activity,the deal sizes are not as large as other industries like oil and gas or telecom.According to Mehul Savla,vice-president,ICICI Securities,"The deal sizes in the textile sector will not be over Rs 200 crore.Unlike some other sectors,these companies cannot afford to raise equity capital above Rs 500 crore."
Posted On : 1/2/2006 1:52:00 PM

 
 
 
Textile companies to increase finances to fund expansion