Textile companies lined up to hit the capital market

Many textile companies are lined up to hit the capital market to raise money. This moves comes at a time when the Indian textile sector is fighting hard to deal with the fall in exports as well as huge competition and volatility of currency.

The companies such as Ankita Knitwear, Sai Silks Kalamandir, Emmbi Polyarns, Cantabil Retail and Mandhana Industries have sought the approval of Securities and Exchange Board of India (Sebi) to come out with initial public offerings (IPOs). According to the sources, many other companies are at varying stages of the due diligence process to hit the capital market with small-to-mid-sized public offerings.

The emergence of cheap-rate exporters like Bangladesh, Pakistan and Turkey and the pressing dominance of China have weakened India's chances of gaining more export share. The apparel sales overseas dipped more than 15% in June quarter with silk and man-made fibres being hit badly, due to the competitions faced by the Indian products from the cheaper Chinese and Pakistani products amid shrinking demand in key western markets.

Moreover, the appreciation of rupee is another concern for the textile exporters. The rupee has appreciated more than 13% since March this year from 52.2 levels to 46.11. The profit margins of the textile firms was hit by the rise in the Indian currency proportionally, as most of these firms book a major share of their revenue from exports to US.