Kitex is expanding again?
Today, Andhra Pradesh’s Textile Minister personally visited Kitex HQ in Kochi, inviting them to invest in the state. Kitex MD Sabu Jacob has agreed to meet the AP CM in two weeks.
Opportunities for Indian Textile Manufactures
India’s textile exports are at $16 billion with almost full capacity utilization. Compare that to Bangladesh at $56B and China at $150B — it’s obvious that India has a long way to grow.
With FTAs (UK done, EU expected), geopolitical concerns in Bangladesh, and Western over-dependence on China, India’s textile industry stands at the edge of a new growth cycle.
Kitex Move - Massive Expansion with QIP ?
Kitex seems ready to seize the moment. Their recent investor presentation suggests a QIP (Qualified Institutional Placement) is preferred over fresh debt. That’s a welcome change — dilution for expansion is a healthier route, and shows Sabu is finally aligning with capital markets.
Finally, Focus on Valuation and Minority shareholders?
Till now, I hadn’t seen him show much concern about stock valuation. But it seems he has now realized its importance — possibly why he is merging Kitex Children’s Wear with the listed entity and considering the QIP route.
Can QIP and subsidies together pay off all the debt incurred for expansion?
Kitex was a debt-free company prior to this expansion. Now, the company is exploring QIP and a combined investment plan. As per the MD, they are eligible for a subsidy covering 50–60% of the total investment.
Then same can be used to repay the current loan??
If that happens, it would be a remarkable boost for the company’s valuation
Conclusion? Very promising times. Let’s allow the management to perform — and remain long-term investors.
Dis - Invested when P/E was 10 and Market Cap was less than 1000 Crores.
Ohh Quite Surprise.
Really another expansion??
Massive opportunities for Indian textiles, and the government is very keen on seizing them
Dis: Investor 3 years back..
keeping a sleeping mode