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Arvind Fashions set to become independent of parent company Arvind Ltd

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Arvind Limited, India’s largest textile and branded apparel player, announced its decision today to demerge its branded apparel and engineering businesses from the parent company.
The branded apparel business will be demerged into the entity Arvind Fashion Limited.
At 25 percent CAGR, the branded apparel business is one of the fastest growing apparel and accessory businesses in the country. It has a rich portfolio of international and owned brands.
The portfolio of brands includes US Polo Association, Arrow, Flying Machine, Tommy Hilfiger, Gap, Calvin Klein, Hanes, Gant, Nautica, Izod, Ed Hardy, Elle, Cherokee, The Children’s Place and Aeropostale. It also owns the value chain ‘Unlimited’ and is the franchise partner of the world’s largest beauty retailer ‘Sephora’
Shareholders of Arvind Ltd will be entitled for 1 equity share of Arvind Fashions Ltd for every 5 shares held by them.
The Engineering business will be demerged into an entity which will be named Anup Engineering. The business is engaged in the manufacturing of critical process equipment. Anup has been consistently growing at 25 percent and delivering a robust financial performance. Shareholders of Arvind Ltd will be entitled for 1 equity share of Anup Engineering Ltd for 27 shares held by them.
On completion of the process, both the companies will be listed on BSE and NSE.
Commenting on the development, Sanjay Lalbhai, Chairman and Managing Director of Arvind Limited said: “In the last few years, Arvind Ltd has nurtured a diverse set of business. Two years ago, we demerged Arvind Smart Spaces as an independent company, and its performance has exceeded expectations. We are very pleased to announce that Arvind Fashions and Anup Engineering will also pursue their independent courses now. Arvind Fashions has already demonstrated an industry-leading track-record in the branded apparel and accessory space. Anup has demonstrated an impeccable trajectory on customer delight, topline growth and profitability. Financial independence will help unlock the full potential of these businesses.”
He further stated: “This demerger frees up our resources and allows us to renew our focus on our textiles business, which is not only our foundation but is now well-placed to achieve an accelerate growth trajectory. Over next three to four years, we will invest almost Rs 1,500 crore and transform the textile business. We will do this by focusing on three engines of growth and transformation. These are:

  • Vertical Integration – creating garment manufacturing to become and end-to-end solution providers and strategic supply chain partners to the world’s most successful brands and retail concepts
  • Next Generation Products – redefining textiles by focusing on path-breaking technologies and manufacturing processes like multi-functional textiles and smart-enabled wearables
  • Advanced Material – enable textiles to catalyse the company’s entry into fields like human protection, industrial process, infrastructure and transportation, and thereby build a business with high entry barriers, intellectual property creation, and high returns.

This focus will not only enable us to grow at an accelerated pace, but also drive better return on investments and build a business model that is future-ready.”
Metta Capital Advisors LLP acted a s financial advisors to the transaction, while Walker Chandiok & Co LLP acted as independents valuers and provided the share allotment and share exchange ratios.

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