Indo Count Industries shares soar 12% on Rs 200-crore capex plan

Shares of Industries advanced 12 per cent to Rs 128 on the BSE on Friday after the textile company announced expansion and modernisation projects of existing capacities with capital expenditure (capex) of Rs 200 crore. The total capex will be funded by a mix of internal accruals and debt and is expected to be operational in H2 (October-March) of FY2022.

“The Project Management Committee of the board of directors of the Company has approved expansion of its bed linen capacity by around 20 per cent from its existing annual capacity of 90 million meters to 108 million meters by debottlenecking and balancing its facilities. Further, it proposes to make a brownfield investment for adding commensurate cut & sew facilities and for enhancing the capacity for Top of the Bed (TOB) products. This will entail a capex of around Rs 150 crore,” Industries said in a press release.

The existing spinning unit of the company will also be modernized with compact spinning technology. This will entail a capex of around Rs 50 crore. Post modernization, this capacity will also be used for captive consumption in the home textiles unit, it said.

The company further said the home textiles plant is operating almost at its full capacity. Considering the increasing demand and growing business volume, it was decided to undertake expansion and modernization. These investments are expected to increase the revenue by – Rs 600 crore over the next 2 years, post commissioning, it said.

Despite the run-up today, in the past three months, the stock has underperformed the market by falling 17 per cent against 5 per cent rise in the S&P BSE Sensex. At 11:31 am, it was trading 11 per cent higher at Rs 126, as compared to 0.18 per cent gain in the benchmark index. A combined 585,000 equity shares have changed hands on the counter on the NSE and BSE, so far.

Dear Reader,

Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.

We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor

Source link