Mumbai: Grasim Industries Ltd, part of the Aditya Birla Group, plans to create a subsidiary and transfer its textile units to this in an effort to increase its focus on the textiles business. The company’s board approved a proposal to transfer textile units at Bhiwani in Haryana to the subsidiary.
“This move will enable the new entity to have a more focused approach to the development of textile business and pursue emerging growth opportunities,” the company said in a statement.
A spokesperson for the company said the creation of the entity would separate the company’s textile business from the other businesses. Details of the subsidiary were not made public.
The company’s statement added that the move to transfer the textile units would also enhance Grasim’s shareholder value through a greater focus on its two key business segments—viscose staple fibre and cement.
Grasim has a strong presence in fabrics and synthetic yarns and has two suiting brands, Grasim and Graviera. The company’s textile unit at Bhiwani has its own spinning, weaving and processing units and has a processing capacity of 18 million metres a year.
Grasim also has an unit at Malanpur, but this does not make fabric—it manufactures worsted dyed yarn spun from 100% merino wool along with polyester and other blends.
Grasim has 50 exclusive showrooms for its fabric. It also reaches customers through 200 wholesalers and 25,000 multi-brand outlets. The company claims that it supplies its fabric to international fashion houses in the US and the UK .
For the first quarter ended June, revenues from the company’s textile business saw 5% growth to Rs55.4 crore. Grasim’s revenues grew 26% to Rs4,063 crore. Promoters of the Aditya Birla group hold 25.19% in the company, and financial institutions, 43.41%.
A larger part of Aditya Birla group’s textile business is under another group company, Aditya Birla Nuvo Ltd. In 2006-07, almost one fifth of the company’s revenues of Rs3,420.5 crore came from textiles.