Arvind is to spin off its branded apparel and engineering businesses into separate listed firms as the Indian denim giant looks to place greater focus on its core textiles business.
The move will see Arvind’s branded apparel business demerged into the entity Arvind Fashion Limited. At 25% of CAGR, it is one of India’s fastest growing clothing and accessories businesses with a raft of licensed brands such as Aeropostale, Calvin Klein and Tommy Hilfiger.
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The division saw sales grow 26% year-on-year in fiscal 2017, while EBITDA was up 39%.
The engineering division will be demerged into Anup Engineering, and both will be listed on the Bombay Stock Exchange in the next six to nine months.
Arvind’s textile business, meanwhile, has seen steady topline growth of around 5% year-on-year and EBITDA growth of around 4%. Over the next five to six years, the company is projecting the businesses revenue growth to improve from a current 4-5% per annum to 10-12%.
Arvind says the plan is to transform the division into a “customer centric, IP driven player with global scale”, with a focus on vertical integration, next generation products, and advanced material.
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By GlobalDataMore specifically, it will create an end-to-end solution for garment manufacturing, focus on “path-breaking” technologies and manufacturing processes like multi-functional textiles and smart-enabled wearables, and enter fields such as human protection, industrial process, infrastructure and transportation. The aim, it says, is to “build a business with high entry barriers, intellectual property creation, and high returns”.
The company is planning to invest INR 1,500 Crores over next three years, targeting double-digit growth.
