GIC special investments to invest in Reid & Taylor

Mumbai: In a major private equity investment in the textile sector, apparel firm S Kumars Nationwide has announced that an affiliate of GIC Special Investments will invest Rs 900 crore in its subsidiary, Reid & Taylor, through a fresh issue of shares and warrants.

GIC SI, the private equity investment arm of Government of Singapore Investment Corporation, will make the investment through its affiliate, Indivest Pte Ltd.

Last year, the company had hived off Reid & Taylor into a separate company in order to have a sharper focus on high-margin luxury textiles.

Last fiscal, Reid & Taylor registered revenues of over Rs 400 crore.

At one stage, the company was toying with the idea of listing the new entity with an initial public offering. But, sources say, the company has temporarily shelved the idea because of market uncertainties.

Post-conversion, GIC will own 25.4 per cent of Reid & Taylor, valuing it at Rs 3,540 crore, with the rest with S Kumars.

The company said the investment will help in substantially strengthening Reid & Taylor’s and its businesses and their ability to grow in the luxury fabric and apparel and other textile segments.

The company manufactures the luxury fabric at an integrated facility near Mysore in Karnataka. In fact, Reid & Taylor- Scotland sources its fabrics from this mill for its international market.

S Kumars has a range of brands, including Belmonte and Carmichael House, which offers a range of home linen. It operates in all product categories – fabrics, apparel and home textiles.

Analysts feel that apart from the brands, the PE investor was also attracted by the company’s land assets. It has five manufacturing facilities with a capacity of producing over 2,00,000 meters/day. It has 30,000 outlets across the country.

Last fiscal, the company clocked revenues of Rs 1,748 crore, up by about 42 per cent from the previous fiscal. Its net profit for the year was 66 per cent higher at Rs 205 crore.

The scrip moved up 0.57 per cent on the BSE to close at Rs 106.55 on Tuesday.