KItex Apparel Parks gets fresh Rs103cr promoter funding

KOCHI: Kitex Apparel Parks Ltd (KAPL), the Kitex group’s much-publicised Telangana project, is getting the next installment of investment to the tune of Rs102.65 crore from its promoters.

A few weeks ago, the promoters of the project – Kitex Garments Ltd (KGL) and Kitex Childrenswear Ltd, had  revised the project cost by Rs400 crore, from Rs2890 crore to Rs3290 crore.

Debt part

The KAPL project has a debt component of Rs2023 crore, wherein Rs704.53 crore has already been disbursed by the lenders of the project.

Out of the Rs102.65 crore additional investment to KAPL annuunced by the promoters, 70 per cent will come from Kitex Garments, whereas the remaining 30 per cent will be invested by Kitex Childrenswear Ltd, in the pre-determined ratio.

Capital

While the authorised capital of KAPL, one of country’s largest textile garments manufacturing industrial entities taking shape in Telangana, is Rs750 crore, its current paid-up capital is Rs410.65 crore, according to a filing made by Kitex group to the stock markets.

KAPL is a subsidiary of the Kitex Garments wherein 70 per cent of capital investment will be made by the company and the balance 30 per cent will be invested by Kitex Childrenswear Ltd, a member of the Kitex Group.

The project, once commissioned, will carry on the production of textile items, such as yarn, fabrics, garments, apparels made from natural or synthetic fibres or from blends of both, including children’s garments, babywear, infantswear, menswear, etc

Kitex Garments, as the majority shareholder in KAPL, has provided guarantee for the Rs2,023 crore borrowings sanctioned by the lenders, according to a Kitex statement.

First phase

The KAPL project’s first phase is likely to be completed by the end of March 2025 and the second phase by the end of 2026.

While the first phase of the project was initially expected to be completed a year ahead of the scheduled date of commencement (SCOD), it failed to catch up with the targeted time frame owing to operational reasons.

“However, the entity now expects to commence spinning operations at its Warangal unit by September 2024,”an ICRA document said.

The decision to set up the prestigious capital-intensive KAPL project in Telangana has its due share of political nuances too.

The managing director of Kitex group, Sabu Jacob, who had accused Kerala government of targeting his group, had decided to set up his next project outside Kerala.

Kitex profit

Meanwhile, Kitex Garments Ltd (KGL) has reported a standalone net profit of Rs29.95 crore for the quarter ended June 30, 2024 (Q1-FY25).

This is 15.23 per cent higher than the Rs25.99 crore net profit the company logged for the immediately preceding quarter (Q4-2024) and was 2.75 times the Rs7,98 crore it recorded for the same quarter in the previous year.

Revenue

The revenue generated by KGL for the quarter under review was Rs190.44 crore compared with Rs173.05 crore it earned for the previous quarter and Rs145.78 crore the company turned in for the same period in the earlier year.