S KUMARS RAISED FUNDS OF Rs.900 Crores FROM GIC

By Bharat Ratna

• Indivest Pte Ltd, an affiliate of GIC Special Investments ("GIC SI") will invest Rs 900 crores in Reid & Taylor through a fresh issue of shares and warrants
• After this deal of post-conversion, GIC SI would own 25.4 per cent of Reid & Taylor, valuing the company at Rs 3,540 crore
• This investment helps and strengthen Reid & Taylor business and their ability to grow in the luxury fabric and apparel and other textile segments.

Mumbai based Apparel firm S Kumars Nationwide Ltd (SKNL) has raised Rs 900 crore from GIC Special Investments for its retail unit Reid & Taylor (India) Ltd and the company informed in a statement to Bombay Stock Exchange. S Kumars’ retail unit is raising the capital via a fresh issue of share and warrants to Indivest Pte Ltd, a unit of GIC SI.

GIC affiliate unit Indivest would own 25.4 percent of Reid & Taylor post-conversion. The deal values Reid & Taylor at Rs 3,540 crore. The remaining 74.6 per cent of Reid & Taylor will be owned by SKNL. GIC SI investment in Reid & Taylor will substantially strengthen the business and their ability to grow in the luxury fabric and apparel and other textile segments of the textile industry.

According to earlier reports, SKNL is having plans to open 341 exclusive outlets in India by 2009-2010. Each outlet requires 1,700 sq ft with an investment of Rs 30 lakh. Most of its stores will be located in New Delhi and Mumbai. Production capacity of Reid & Taylor is 8.4 million metres.

Seventy per cent of its sales in value terms is from fabrics and the rest 30 per cent comes from ready-to-wear garments. Reid & Taylor targets the premium and upper-middle segment of the suiting’s market. Other brands of SKNL are Belmonte, which targets the mid-premium consumer and Carmichael House, which offers a range of home linen. SKNL is also planning to acquire firms in Europe and North America.

The Reid & Taylor brand caters to the premium and upper-middle segment of the suitings market. S Kumars also sells suiting under the Belmonte and S Kumars brands and home textiles under the Carmichael House brand

Earlier Foreign fund house Morgan Stanley has increased its stake in apparel manufacturer S Kumars to over seven per cent for Rs 103.34 crore.

Morgan Stanley & Co International plc has acquired 72,72,723 shares amounting to 3.56 per cent in S Kumars Nationwide Ltd through open market transaction on March 17, the company said in a disclosure to the Bombay Stock Exchange.

This textile and apparel firm, S Kumars Nationwide posted a net profit of Rs 62.52 crore for the fourth quarter ended March 31, 2008, up 65 per cent as compared with Rs 37.88 crore during the corresponding period last year. The company recorded revenues of Rs 525.63 crore for the quarter under review as against Rs 371.66 crore during the March quarter last year.

S Kumars recorded a 66 per cent jump in net profit for the financial year ended March 31, 2008 (FY08) at Rs 205.59 crore as against Rs 123.52 crore a year ago. During FY08, it registered revenues of Rs 1,748.65 crore as against Rs 1,229.54 crore in FY07.