Oil-to-yarn and retail conglomerate Reliance Industries (RIL) has divested 49% stake in its textiles business to Chinese firm Shandong Ruyi Science and Technology Group (Ruyi) for an undisclosed sum, the company said in a statement on Tuesday.

Textiles is the first business with which RIL’s founder Dhirubhai Ambani laid the foundation of the conglomerate and grew it to the $74.5-billion enterprise at present, through a backward integration process. The process saw RIL move from manufacturing textiles to polyester and other petrochemicals, refining crude products and producing oil and gas. In the process, textiles became a marginal business, accounting for less than 1% of turnover and profits, for the company, now led by Mukesh Ambani, Dhirubhai’s son.

RIL said that the company will transfer its textiles business to a newly-incorporated entity in which it will retain 51% stake. It will receive cash consideration from Ruyi for the remaining equity being divested.

RIL’s existing textile business operates under the brand name ‘Vimal’ — named after Dhirubhai’s brother Ramniklal Ambani’s son — and specialised in worsted and synthetic suiting fabrics. Ruyi is a $3-billion textile company with global presence in regions like America, Europe, Japan, Australia, New Zealand and China.

“Ruyi also operates in India under the ‘Georgia Gullini’ brand in the worsted suiting segment. This business operation and activities will get realigned to strengthen the JV,” RIL’s statement said.

“Our joint venture with the Ruyi Group will help RIL reposition its textile business on a high-growth path,” RIL’s executive director Nikhil Meswani said. “Our partner’s deep commitment and global reach in the textile business will enable this JV to harness the growth potential of the Indian market and emerge as a global textile player.”

Vimal, with its brand tagline ‘Only Vimal’, was a household name in India through the 1970s till the early 1990s, and used famous Indian film stars and cricketers as brand ambassadors. Its fortunes started to decline after a slew of Indian and international brands started entering India with readymade apparels at multiple price points.

According to an RIL official, the move is aimed at “infusing life” into the textiles business. “Since Ruyi is completely focused on textxiles, they can take strategic decisions regarding how to grow the business,” he said, on condition of anonymity.

“RIL has tried to revive the Vimal brand and the textiles business over the last couple of years, but it hasn’t really worked out,” says SP Tulsian, an independent stock market analyst who has tracked RIL since its listing in 1977. “It is difficult to assess what the valuation of the textiles business could be since it is a very small part of the company but in all likelihood the consideration to be paid to RIL will be for tangible assets like the plant and land, and not for the intangibles like the Vimal brand.”