Coimabore Textile Mills: Pouring Investments!
Coimabtore:
Coimbatore-based KPR Mill has bagged $23.3 million (Rs 105 crore) in private equity funding from Blue River Capital (an affiliate of Edelweiss capital), Brandot International and US-based private equity firm Argonaut. The deal, touted as the largest PE investment in the country’s textile sector, also marks the entry of Martin Trust (through his firm Brandot), a well known investor in the global textiles and apparel space. The three firms are picking up approximately 10 per cent stake in KPR Mill, which ended the last fiscal year with Rs 450 crore in revenues. The funds will be used to meet the company’s working capital requirements.
This investment puts KPR’s valuation at more than twice its revenues and may be slightly higher than the recent private equity investment roped in by S.P. Apparels, the Avinashi-based exporter of knitted garments. New York Life Investment Management (NYLIM) invested Rs 36 crore for a 10.71 per cent stake in the Rs 200-crore S.P. Apparels last month.
“The association with Martin Trust would help us enter the US market in a big way. We also plan to come out with an IPO,” says C.R. Anandakrishnan, executive director, KPR Mill.
Says Martin Trust, founder, Brandot International: “KPR is well-positioned to build an integrated value chain for customers. We look forward to working together to strengthen sales and marketing, production know-how and operations.” Says Anandakrishnan: “The perception about private equity is slowly changing among textile companies in the region.”
Currently, the company’s entire Rs 130-crore garment exports are to Europe. But it plans to set up a new unit that will produce mainly for the US market. It will invest Rs 500 crore, funded mainly through term loans, for expansion. This would more than double its spinning capacity to 210,000 spindles and the new garment unit would take its total production up to 30 million garments a year. With the new unit, it also hopes to reduce the outsourcing of its garment production from 70 per cent to 40 per cent.
The company is targeting Rs 1,000 crore topline in the next two years. The 30-tonne-per day processing unit being set up at Perundurai is expected to be commissioned by March 2007, and will be significant in making KPR Mill a fully integrated company.
Source: Business World
