Bombay Rayon hikes FII investment limit to 40 per cent

Mumbai: Bombay Rayon has increased the FII investment limit in the company to 40 per cent of its paid up share capital. Shareholders at an extra-ordinary general meeting (EGM) have approved investment by foreign institutional investors (FIIs) of up to 40 per cent in the equity share capital of the company by purchase or by acquiring from the market, the company informed the Bombay Stock Exchange.

Private placement in the equity of the company under portfolio investment scheme on repatriation basis or otherwise, would also be allowed for FII investment, it added.

The decision follows the setting up of a joint venture with 4004 Incorporated India, the procurement arm of American retail chain Steve and Barry`s.

The US company will source 2.5 lakh to 3 lakh pieces of shirts every month from Bombay Rayon and a manufacturing facility will soon be set up in south India.

4004 is tying up for a vertical integration facility for garments and the deal is almost finalised. It will also set up a manufacturing facility in joint venture with Wagon Wheel, a local firm in Vishakpatnam.

Since strategic sourcing holds the key for global retailers, the company is planning to set up 16 offices in India in 2007, including those in Bangalore, Ludhiana and Tirupur.

4004 currently sources 25 per cent of its products from China, nearly 30 per cent from India and the rest from South East Asian and African countries.

In 2006, Bombay Rayon had raised Rs300 crore through placement with qualified institutional investors.