Textile companies rush in with IPOs as TUFS expiry looms

Mumbai: Textile companies are rushing ahead with capital raising plans before the expiry of government sponsored Technology Upgradation Fund (TUF) in March 2007.

Six textile companies mobilised over Rs400 crore by issuing IPOs in 2007. Under the TUF, the textiles firm receives the required finance at the subsidised interest rate of 5 per cent from the special fund created by the government.

Some of the companies, which have already approached the capital market in recent times, are House of Pearl Fashions, Hanung Toys, Technocraft Industries, Mudra Lifestyle, Indus Fila, Abhishek Mills, Evinix Accessories and Vijayeshwari Textiles.

The removal of textile quota restrictions imposed by the European Union (EU) and the US as per the WTO agreement has seen an increase in the export sales of domestic textile firms. With the availability of incentives for export promotions in domestic market and huge opportunities for growth lying ahead in the export market, many small- and mid-sized textile companies are rushing to the primary market to raise funds to finance their expansion facilities.