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One of the largest integrated textile and branded apparel player from Gujarat ---- Arvind Ltd --- has decided to demerge it's real-estate business and transfer it to the company's wholly owned subsidiary Arvind Infrastructure Ltd (AIL). Arvind also plans to list AIL on the stock exchanges.
AIL, manages 11 real-estate projects in Ahmedabad and Bangalore with 5.3 million square feet over 360 acres of land. "In order to drive the growth of real estate business independently, the Board of Arvind Limited on Wednesday approved the Scheme of Arrangement between Arvind Limited and AIL for de-merger and transfer of real estate undertaking to AIL," stated an official release from the company.
"AIL will issue, to the shareholders of Arvind Limited, one share of Rs 10/- each for every 10 shares of Rs 10/- held by them in Arvind Limited, and Arvind Infrastructure Limited (AIL) shall be separately listed on Stock Exchange," it added.
"Arvind sees an attractive opportunity and strategic fit in real estate development. The demerger will allow Arvind to deploy its resources fully in its core activities and allow AIL to raise further capital and debt as required for its growth," stated Jayesh Shah, Director & Chief Financial Officer of Arvind Ltd in the release issued here.
Arvind Ltd has recorded a 14 percent growth in Profit After Tax (PAT) as per the the first quarter results declared on Wednesday. The profits grew to Rs 90 crore compared to the Rs 79 crore in the corresponding quarter, last year. Commenting on the results, Shah said, "The revenue growth of 19 percent is led by 26 percent growth in Brands and Retail business and 13 percent growth in textile business with stable operating profit margin expansions in both the businesses."