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Mudra Lifestyle lines up Rs 220cr expansion plan

Mudra Lifestyle lines up Rs 220cr expansion plan

Author | Source: Business Standard | Wednesday, Oct 18,2006 10:03 AM

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Mudra Lifestyle lines up Rs 220cr expansion plan

Aiming at high growth prospects in the current retail boom in India, Mudra Lifestyle Ltd, the Mumbai-based integrated textile company, has chalked out a massive expansion plan in its weaving, processing and garment manufacturing facilities at a capital expenditure of Rs 220 crore.

Under the expansion plan, the company is adding up 84 weaving machines to its existing 177 while the processing capacity would be enhanced up to 185,300 metres per day from the existing facility of 80,000 metres per day.

Garment manufacturing capacity would be increased to 35,500 pieces per day from 10,500 pieces per day. In addition, Mudra is adding up a 2,000-kg per day yarn dyeing facilities to make the company fully integrated.

"Once the expansion is completed in October 2007, Mudra will be ready to meet any requirement order from domestic as well as international customers," said Murari Agarwal, chairman and managing director.

"We are one of very few independent integrated readymade garment manufacturers," he added.

In order to part finance the expansion project, the company is planning to enter the capital market in the first week of December for which it is gearing up to file draft red hearing prospectus very soon.

The company is set to raise approximately Rs 100 crore from the capital market while the remaining Rs 120 crore will be raised through term loans.

The company owns eight weaving factories in three different locations, including in the textile hubs of Daman and Bhiwandi. It also owns one processing unit in Navi Mumbai and three garment manufacturing units in Bangalore.

"Our product-mix is unique which differentiates us from almost all players of the industry. We offer all types of product mix to meet the customers' requirements, including 100 per cent cotton, polyester, polyester-cotton mix, polyester-viscose mix etc," Agarwal said.

One of the biggest player in shirtings, Mudra supplies its shirts to almost all leading brands on the domestic as well as international front that include Wal-Mart, JCPenny, Rip Zone, Primetex, Albacco, Allen Flusser, American Models, American Julliet, Reliance, Raymonds, Killer, Lee and Madura Garments.

The company is focusing now on the domestic market with its products diversion towards local retail chains.

Presently, 75 per cent of its product goes to overseas while by the end of 2007 the company wants to bring it down to 50 per cent because of immense potential in the domestic market.

Mudra earned a net profit of Rs 10 crore on a turnover of Rs 107 crore in the 2005-06 financial year.

In the first half of the current fiscal, the company reported a net profit of Rs 7 crore on a turnover of Rs 66 crore. The $42-billion textile industry in India is set to open new vistas for readymade garment exporters with investments of Rs 30,000 crore being expected to flow in in the next three years.

If the industry succeeds in meeting this investment target, Indian industry would be able to meet the rising demand from overseas and growing mall culture in the domestic market.

"The company targets value added products that fetch about 30 per cent premium from the conventional products. Apart from that, the growing demand for branded product in the textile sector will surely fetch more profit for the company," Agarwal said.

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