Sanjay Lalbhai's textile & apparel firm Arvind Ltd is demerging its real estate business to its wholly-owned subsidiary Arvind Infrastructure Ltd with the aim to eventually list it on the bourses as a separate company, the firm said late on Wednesday.
The business will be transferred from April 1, 2015.
The board of directors of the company at its meeting held on July 30, 2014 approved the scheme of arrangement to transfer the real estate undertaking to Arvind Infrastructure and reduction and restructuring of share capital of Arvind/Arvind Infrastructure, it said.
As per the arrangement scheme, equity shareholders of Arvind will receive one fully paid up equity share of Rs 10 each of Arvind Infrastructure for every 10 fully paid up equity shares of Rs 10 each held on the record date in the company.
As a part of it, Arvind Infrastructure will also seek listing on the stock exchange (s) after approval of the scheme by the High Court.
Arvind Infrastructure is engaged in real estate development and as of now, it is managing 11 projects in Ahmedabad and Bangalore.
For the year ended March 31, 2014 the real estate business generated revenues of Rs 91.65 crore with segment profit of Rs 21.71 crore.
The demerger would allow the realty business to raise resources independently for future growth.
Gujarat-based Arvind Ltd (formerly Arvind Mills Ltd) manufactures, sells and exports textiles and garments. The company also has some small business units involved in manufacturing and marketing of EPABX and Rax systems as well as provides information technology services to the customers.
Early this year, Renuka Ramnath’s Multiples Alternate Asset Management Pvt Ltd (Multiples PE) had picked up a small minority stake in Arvind for over Rs 150 crore ($24.4 million).
For the quarter ended on June 30, 2014, the firm recorded a 19 per cent consolidated growth in revenue at Rs 1,773 crore against Rs 1,491 crore in the corresponding quarter of 2013. PAT grew 34 per cent to Rs 90.51 crore in the same period.
Shares of Arvind were trading at Rs 233 each, down 3.36 per cent on BSE in a flat Mumbai market on Thursday at 11.24 PM.
(Edited by Joby Puthuparampil Johnson)