Blog: Leonie BarrieIndia’s buyout trend

Leonie Barrie | 22 August 2007

Yesterday’s buyout of a 70.1% stake in Gokaldas Exports by US private equity firm Blackstone is seen as a watershed event in India’s garment industry. And it’s significant in more ways than one.

This is just the second buyout of a major Indian enterprise by a global turnaround fund – the first was the acquisition last October by investor WL Ross & Co of textile producer OCM India for US$37m – and while one might be an anomaly, two’s the beginning of a trend.

Foreign investors are clearly waking up to the potential of the country’s garment sector – but whether this is on the domestic front (worth an estimated $20-30bn) or in exports (around $10bn a year) remains to be seen. Even though Gokaldas is best known for its export strength, it now says it plans to re-enter the retail sector in India and abroad.

For exporters, there are well-documented problems such as the appreciation of the rupee and a slowdown in shipments to the US, as well as infrastructure and legislative restrictions closer to home.

Observers also believe that buyouts are now set to gather momentum in the country, and that a wave of consolidation could follow as the smaller players sell out. Not only are there too many manufacturing companies for the scale of India’s exports, but retail customers increasingly prefer to deal with fewer, but larger, suppliers.

US private equity firm buys majority stake in Gokaldas Exports


HOT ISSUE

India’s buyout trend

The recent takeover of India's largest textile company Gokaldas Exports by a US private equity firm suggests foreign investors are waking up to the potential of the country’s apparel sector. But as bu...

BLOG

A new re:source from just-style

Some of just-style’s more eagle-eyed readers might have noticed a small change to the menu bar on the homepage: the addition of the word re:source. Yes it might be a small change – but it marks the co...

BLOG

Trump's trade ramifications continue to unravel

Over the past week just-style has continued to try to unravel the potential ramifications of Donald Trump’s election as the next president of the United States....

BLOG

What's in store following Trump's election?

One event dominated the international airwaves last week, and on just-style too we took a closer look at the surprise election of Donald Trump as the 45th president of the United States....

just-style homepage



Forgot your password?