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

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

Gokaldas Exports shares fell 4% to Rs 390 on the National Stock Exchange (NSE) in the intraday session on Thursday after more than 10% of THE textiles and apparel firm changed hands in a block sale.

According to exchange statistics, about 8.15 million equity shares, or 13.5 percent of Gokaldas Exports’ total equity, had changed hands on the NSE as of 9:23 AM. The identities of the purchasers and sellers were not immediately available.

According to a report, Clear Wealth Consultancy Svcs LLP, a private equity (PE) company, was aiming to sell an 8.25 percent share in Gokaldas Exports in a block sale today. The total value of the block transaction is about Rs 234 crore.

According to the ownership pattern data, Clear Wealth Consulting Svcs LLP, the promoter of Gokaldas Exports, controlled 12.46 million shares, or 20.56 percent, of the firm as of December 2022.

Despite today’s loss, the stock has outperformed the market in the last month, rising 9% compared to a 1% decrease in the Nifty 50.

Gokaldas Exports, with an annual capacity of more than 36 million pieces, is one of India’s major clothing exporters. Gokaldas concentrates on producing sophisticated garments, which protects it from price-based competition.

The firm boasts an excellent clientele of renowned multinational brands, with ‘GAP’ and ‘H&M’ contributing significantly to sales. The United States accounts for roughly 80% of total sales.

“With the latest fundraising (QIP: Rs 300 crore), the business has improved its balance sheet by repaying about Rs 300 crore in debt, making Gokaldas Exports net debt-free (net cash surplus: Rs 369 crore). The increased government emphasis on garment exports and global brands’ China + 1 strategy give long-term development opportunities for firms such as Gokaldas Exporters,” “ICICI Securities analysts said in their December quarter result report.

According to the company’s management, Q4 FY23 will witness sequential growth, and H2 FY24 will outperform H1 FY24.

Some businesses in the spinning industry reported an increase in demand as a result of China’s opening up during Q3 FY23. A few textile firms have said that retailers have observed stronger demand as inventory has been reduced.

Analysts at Emkay Global Financial Services think that even though the textile industry is having a hard time, there are signs that things are getting better. “Although muted demand from the United States and the United Kingdom remains a key concern, the correction in domestic cotton prices, expanding yarn-cotton spread, initiation of demand from some retailers, improved demand from China, and lowering of the domestic cotton premium over international cotton prices are key positives,” the brokerage firm said in a textile sector update.

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