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Anand Jain’s Firm Buys 7% in Blackstone Controlled Gokaldas Exports

29 October, 2008

Anand Jain, chairman of Jai Corp Ltd. and a confidante of Reliance Industries chairman Mukesh Ambani, has bought 6.64% equity stake in Gokaldas Exports.

The acquisition of shares has been done through Vinamra Universal Traders  – one of his investment firms. Moreover Jain’s name does not figure in the shareholders’s list submitted to the stock exchanges. The stock purchase in Gokaldas Exports is touted to be a part of ‘routine’ treasury investments by the group. Although an earlier report by ET said that Jain has bought 10% stake in Gokaldas, the stock exchange filing mentions 6.64% only.

Interestingly, Jain’s acquisition comes at the same time as the Reliance Industries’ attempt to revive ‘Only Vimal’ and other textile brands which now earn less than 1% of revenues for them. RIL had started as a textile company in 1979.

Blackstone had acquired a 50% stake in Gokaldas from its promoters last year. The deal was sealed at Rs 275 a share, 20% higher than the current market price at that time. The mandatory open offer to shareholders followed, which increased Blackstone’s stake to 68%. As a result, the Hinduja family’s shareholding had come down to 20%. Blackstone had spent close to Rs 600 crore just before the stock market started collapsing.

The management of Gokaldas, a readymade garment manufacturer, is run by the Hinduja family, even though Blackstone holds majority shares. Moreover, the concentration of 98% shares among three shareholders — Blackstone, the Hindujas and Jain (through Vinamra) — has left little room for any trading to be done and as a result Gokaldas has become a highly illiquid stock.

Lastly shares were purchased on 22 January and 11 January this year in bulk deals of 3.25 lakh shares at Rs  266.5/sh and 1.73 lakh shares at Rs 268.7/ sh respectively.

Meanwhile Gokaldas has denied the rumors that Blackstone is planning to delist and then relist the firm as and when market condition improves.

Anand Jain was appointed Chairman of Jai Corp in June this year only. Jai Corp is into manufacturing businesses like steel, plastic processing and spinning yarn and has newly started focusing and investing in emerging opportunities like developing SEZs, infrastructure, venture capital and real estate. Recently Jai Corp was believed to be foraying into city gas, LPG distribution. Since the split between the warring Ambani brothers, Jai Corp has been getting into businesses in which the Anil Ambani group has a presence.

There have been quite a few PE deals in textile sector in the past also that include Wilbur Ross promoted WL Ross & Co. LLC acquiring OCM India back in 2006 for $37 mn and  Citi Venture Capital investing Rs 81 cr in textile firm, Spentex Industries in late 2005.


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Anand Jain’s Firm Buys 7% in Blackstone Controlled Gokaldas Exports

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