Arvind to demerge, list real estate business

Mumbai: Textile and apparel maker Arvind Ltd on Wednesday announced the demerger and transfer of its real estate business to subsidiary Arvind Infrastructure Ltd.

In a filing to the BSE, the company said the real estate unit will be transferred to Arvind Infrastructure from 1 April 2015.

Under the transfer scheme, equity shareholders will receive one equity share of Arvind Infrastructure for every 10 equity shares held in Arvind Ltd.

As a part of the scheme, the firm will seek to list Arvind Infrastructure on stock exchanges after securing requisite approvals.

On Wednesday, Arvind reported a 43% jump in its net profit for the quarter ended 30 June. The net profit for the period rose to ₹ 113.33 crore from ₹ 79.35 crore in the same period last year.

Revenue increased by 14.5% in the period to ₹ 1,263.86 crore.

Arvind Ltd shares closed at ₹ 241.10 on the BSE, up 14.24% from Monday’s close, while India’s benchmark Sensex index rose 0.37% to 26,087.42 points.

Jayesh Shah, director & chief financial officer, said: “The revenue growth of 19% is led by 26% growth in brands and retail business and 13% growth in textile business with stable operating profit margin expansions in both the businesses.”

On the demerger of the real estate business, Shah said: “Arvind sees an attractive opportunity and strategic fit in real estate development. The demerger will allow Arvind to deploy its resources fully in its core activities and allow AIL (Arvind Infrastructure Ltd) to raise further capital and debt as required for its growth.”