The Hindu Business Line : Gokuldas Images sells 16 pc stake to IL&FS

GOKULDAS Images has sold 15-16 per cent stake in the company to IL&FS, and is planning a major expansion of its retail brand, Weekender in the next two years.

The deal was inked during the last week of December, Gokuldas Images' Managing Director, Mr Jagdish Hinduja, told Business Line. He said the company had mopped up around Rs 44 crore from its stake sale.

"We plan to use the funds for expanding our production capacity," Mr Hinduja said. He said the company plans to double the production of its suit plant to around 5,000 suits per day. The company also expects to float an IPO sometime later.

Mr Hinduja said the company expects to double the turnover of its Weekender retail outlets to around Rs 100 crore by 2006-07, and plans to set up 20 more outlets by March 2007. The company has also decided to open separate outlets for kids and teenagers. At present, both kids and teenager garments were in the same outlet.

He said the company might appoint a head for all its retail operations and domestic brands soon. Gokuldas is also looking at launching a men's wear brand. "We don't plan to acquire any brands in this space, but will have our own brand," he added.

Gokuldas expects to cross a turnover of around Rs 400 crore during the current fiscal, posting a growth of around 25 per cent over last year. It supplies garments to companies such as VF Corporation, which has Lee and Wrangler as some of its brands.

Mr Hinduja said there was a huge market left open with the imposition of sanctions against China by the European Union and the US, and with the help of the Government, India can seize a better share in the global garment market whose size was estimated to be around $220 billion. India exports a mere $6 billion worth of readymade garments every year, he said. "But we will have a better chance now to capture a larger share if the investments are pumped in at the right time." During the current year, domestic companies invested around $3 billion into machinery and other equipment, he said.

Mr Hinduja said the Government needs to liberalise labour laws for the Indian companies to become more competitive in the global market. The Government should also reduce taxes on import of raw material to give boost to the industry.

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