Expects to sell two properties in next 18 months; may use Rs600 crore for expansion.
Textiles company Alok Industries expects to finalise the sale of its two properties within one year to 18 months and is eyeing Rs1,500-1,600 crore from the deals.
The properties include around 7 lakh square feet of commercial space at Lower Parel and around 500 acres of land in Silvassa.
“These deals should be done in a year or 18 months’ time,” said Sunil Khandelwal, chief financial officer, Alok Industries Ltd.
The company may use Rs900 crore from the sale proceeds to retire debt raised for buying the commercial space.
The remaining Rs600 crore would be available for investment in the company’s textile business. It will either use the Rs600 crore to retire debt in the textile segment or for expansion plans.
In the long term, the company is positive about both the domestic and export markets.
“Raw material prices, rupee appreciation issues will remain, but the most important factor is a buoyant market. The worst is over in both the domestic and international markets including the UK and the US. In the first five years exports will drive the textile market for Indian players and the next five years the domestic demand would play a major role,” said Khandelwal.
The company also sees a correction of around 5% in the cotton prices. After the current all-time high, no further rise is expected at least for the next six months, he said. The company, on the other hand, is expecting a 10-15% rise in polyester prices in the next six to eight months.
A new cotton crop is expected from this month. The prices will not move upwards at least in the short term that is for the next six months. This year’s crop is believed to be really good and if that is the case, we are expecting prices to come down by around 5%,” said Khandelwal.
In the Shankar 6 variety, Khandelwal expects a correction of around Rs3,000 from Rs38,000 per candy to Rs35,000 per candy.
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