Kolkata, Oct. 7
AFTER the completion of the restructuring of Sutlej Industries Ltd, a K.K. Birla Group outfit, the company will turn into a non-banking financial company (NBFC) as its entire textile business has been transferred to a wholly-owned subsidiary, Sutlej Textiles and Industries Ltd.
However, the group will continue to have both the Sutlej outfits as listed entities. The Sutlej Industries board had declared the issue of fresh shares of the new company for every one share of the old outfit.
According to Mr C.S. Nopany, Vice-Chairman of Sutlej Industries, there are no plans of winding up the company.
"We are holding a substantial amount of our investments through that company. So, it will remain. However, it will be a non-banking finance company as its only source of revenue will be from those investments. At present, there are no plans to delist this company," Mr Nopany told Business Line.
Restructuring: In August, the K.K. Birla Group announced the restructuring of Sutlej Industries. The date to give effect to the scheme of arrangement was set for July 1, 2005. The valuation was done by N.M. Raiji & Co and the fairness opinion was provided by Ernst & Young.
Sutlej Industries has three factories. These are located in Rajasthan, Jammu and Gujarat. It is mostly into spinning and weaving of cotton, synthetic and blended yarn.
Doubling capacity: The K.K. Birla group had already decided to double the company's production capacity from 85 lakh meters per year to 1.75 lakh meters per year at an estimated cost of Rs 65 crore.
Sutlej Textiles also plans to enter the readymade garments and home furnishings business soon. According to Mr Nopany, activities have already started on this front.
Asked if any consultant has been appointed, he said: "We have tremendous amount of expertise in this area of business and it had been gathered over the years. We are doing it all by ourselves ."
For the year ended March 31, 2005, Sutlej Industries registered a net profit of Rs 16 crore against Rs 11.60 crore in the previous fiscal, marking a growth of 37 per cent. The turnover jumped by 13 per cent to Rs 546 crore against Rs 483 crore in 2003-04. The Earning Per Share increased to Rs 15.10 from Rs 10.99.
It may be noted that three other Birla groups led by Mr Kumar Mangalam Birla, Mr B.K. Birla and Mr S.K. Birla are already in the readymade garments business in a big way with their Grasim, Century and Birla VXL outfits respectively.