Mumbai: Alok Industries has raised Rs 7,000 crore from parent Reliance Industries and two lenders, Axis Bank and State Bank of India. The company will use this fund for expansion and repaying debt.
The textile maker raised Rs 3,700 crore in the form of term loans and working capital loans from banks, while Reliance Industries infused Rs 3,300 crore in the form of non-convertible cumulative redeemable preference shares (NCCRPS).
Banks have provided non-fund-based limits and working capital loans of Rs 100 crore each. State Bank of India and Axis Bank provided loans worth Rs 1,750 crore each for a nine-year tenure, including a two-year moratorium. Effectively, payments will begin from January 2026.
Alok Industries’ textile products are also marketed through the fashion and lifestyle segment of Reliance Retail. The company manufactures leather goods, other apparel items and textiles, and is active in the spinning sector, giving priority to infrastructure as well as research and product development.
About Alok Industries
Alok Industries is a textile business that operates in the polyester and cotton markets. The company manufactures leather goods, other apparel items and textiles, including packing and repairing. Alok is a leading player in the Indian spinning sector, with state-of-the-art infrastructure as well as priority research and product development.
During Q3 FY2024, the company reported revenue from operations of Rs 1,253.03 crore, compared to Rs 1,717.60 crore in Q3 FY2023. Alok Industries’ net loss widened to Rs 229.92 crore in Q3FY24 as against Rs 249.83 crore.
Bid by RIL and JMFARC
Reliance and JM Financial Asset Reconstruction Company bid Rs 5,000 crore for Alok Industries Ltd in 2022. Currently, RIL holds ~40.01% stock in AIL, while JM Financial Asset Reconstruction Company (JMFARC) – Trust holds 34.99%. Additionally, RIL owns 40% of JMFARC through a subsidiary. The operations of Alok Industries are managed and supervised by RIL through its 3 nominee directors appointed on the Board of AIL.
Industry prospects
The Indian textile sector is one of the oldest industries in the Indian economy, dating back several centuries. The Indian textile and apparel industry is expected to grow at 10% CAGR from 2019 to 20 and reach US$ 190 billion by 2025 by 2026. India’s share in global trade in textiles and apparel is 4.6%.
