- Right issue price Rs.3, current price Rs. 4.15 which is gain of 38%.
- Globe textile PAT has increased 4x from Rs. 47.61 lacs for Dec-22 to Rs. 163.83 lacs for Dec-23.
- Promoter has subscribed 40.91% in right issue (Rs. 18 crores).
Globe Textiles (India) Limited (NSE: GLOBE), a globally recognised garment manufacturer, supplier, and trader opened their rights issue for subscription for Rs. 45.34 crs last week on 6th March 2024 and will close on 15th March 2024. The company’s shareholders are entitled to get one Right equity share for each fully paid-up equity share held as of the record date of February 23, 2024.
As per NSE website, there are 3 right issue going on. Upon analysis by our team, we found Globe Textile to be the Most profitable right issue out of the current 3 rights issues. A simple analysis of information available on price of rights and the Current Market Price (CMP) indicates a gap of 43% for Globe Textile, 29% for SouthBank and 2% for SILGO. Market experts say that any rights issue priced below market price offers a great opportunity for the investors to benefit once the shares are allotted. “Given the market volatility in recent times and the downslide of NIFTY, investors should consider companies like Globe Textile India Limited who have a proven track record and existing shareholders must subscribe the issue” said a research analyst of a leading firm.
Another interesting development is about the promoters intention to participate up to 40.91% in the rights issue of the company which was stated in the Right offer document. The promoters and members of the promoters group have subscribed to the full extent of their right entitlements including the right entitlements renounced in their favour by any other Promoter(s) or member(s) of the Promoter Group.
The proceeds of the issue are to be partly utilised for fuelling forward integration via acquisitions which is expected to help in achieving estimated growth of over 30% in consolidated revenue to Rs. 520 crores in the next 3 years. The financial results for Q3, 2023 were announced recently where the company’s profit after tax increased 4x from Rs. 47.61 lakhs to 163.83 lakhs in the previous year’s comparative quarter.
Demonstrating confidence in the future plans of the company, Mr. Bhavin Parikh, Chief Executive Officer at Globe Textiles (India) Limited, stated that “This is an important milestone in the growth of the company. The funds will fuel our forward integration plans via acquisition translating to enhanced capabilities and driving growth. It will enhance our asset base, margins and top line as well as introduce innovative sustainable fashion garments and practices which are sought after by customers from India, Europe and the US. We are confident that this development will help reaching the estimated top line to about 520 crores while improving margin by 2027- 28.”
This addition will increase garment processing capacity upto 20,000 units per day and 6 Lakh units per month, significantly boosting production. Moreover, it will lead to certification as a Zero Liquid Discharge Facility by ATIRA showcasing the company’s dedication to environmental sustainability.
