Alok Industries Raises ₹7,000 Crore From Reliance via NCCRPS

Alok Industries Ltd (AIL) has recently raised a cumulative ₹7,000 crore from parent organisation Reliance Industries Limited (RIL) and two lenders, Axis Bank and State Bank of India (SBI). The textile giant secured ₹3,300 crore from RIL in the form of non-convertible cumulative redeemable preference shares and ₹3,700 crore in term loans and working capital loans from banks. Alok Industries will use these funds for the expansion and repayment of high-cost debt.

About Alok Industries

Alok Industries is a textile business that operates in the polyester and cotton markets. The company makes leather goods, other garment items, and textiles, including things like packing and mending. Alok is a prominent participant in the Indian spinning sector, prioritising research and product development along with having a state-of-the-art infrastructure.

During Q3 FY2024, the company recorded revenue from operations amounting to ₹1,253.03 crore as compared to ₹1,717.60 crore in Q3 FY2023. Alok Industries witnessed an improvement in net losses to ₹229.92 crore in Q3 FY2024 against ₹249.83 in Q3 FY2023.

Bidding by RIL and JMFARC

Reliance and JM Financial Asset Reconstruction Company made a ₹5,000 crore bid for Alok Industries Ltd in 2022. Currently, RIL owns ~40.01% of the stock in AIL, while JM Financial Asset Reconstruction Company (JMFARC) – Trust owns 34.99%. In addition, RIL holds 40% of JMFARC through a subsidiary. The operations of the Alok Industries are managed and supervised by RIL through its 3 nominee directors appointed on the board of AIL.

Industry Prospects

The Indian textile sector is one of the oldest industries in the Indian economy, dating back to several centuries. The Indian textile and apparel industry is likely to grow at a CAGR of 10% from 2019 to 20 and reach US$ 190 billion by 2025 to 26. India has a 4.6% share of the global trade in textiles and apparel.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.