Reliance Industries Ltd (RIL) has acquired polyester chips and yarn manufacturer Shubhalakshmi Polyesters for Rs 1,592 crore.
This is its first acquisition in the traditional textile manufacturing business after purchasing 37.7 per cent of Alok Industries in 2020.
RIL currently holds a little over 40 per cent of the company.
RIL has made a string of acquisitions over the past few years in various areas that include green energy, retail, TV and music content, media and homegrown fashion labels among others.
Reliance Petroleum Retail has executed definitive documents to acquire the polyester business of Shubhalakshmi Polyesters (SPL) and Shubhlaxmi Polytex Ltd (SPTex) for a cash consideration of Rs 1,522 crore and Rs 70 crore, respectively, aggregating to Rs 1,592 crore by way of slump sale on a going concern basis.
RIL added that the transaction is subject to the approval of the Competition Commission of India (CCI) and the respective lenders of SPL and SPTex.
The acquisition is expected to strengthen the textile manufacturing business of RIL.
SPL produces polyester fibre, yarns and textile-grade chips through direct polymerisation as well as extruder spinning with value addition through texturising.
It has a continuous polymerisation capacity of 2,52,000 tonnes per year. The firm has two production facilities, one each in Dahej in Gujarat and Silvassa in Dadra and Nagar Haveli. At Dahej, SPTex operates a plant for the production of texturised yarn.
“The acquisitions are part of the company’s strategy to expand its downstream polyester business,” Reliance said.
SPL registered turnovers of Rs 2,702.50 crore, Rs 2,249.08 crore and Rs 1,768.39 crore in financial years 2019, 2020 and 2021, respectively. SPTex had turnovers of Rs 337.02 crore, Rs 338.00 crore and Rs 267.40 crore, respectively.
While Dhirubhai Ambani, the founder of RIL, began with the yarn trading business and then vertically integrated through the entire polyester chain, it subsequently entered into areas like telecom and organised retail among others.
Currently, the oil-to-chemicals business is its largest revenue earner. The segment posted revenues of Rs 161,715 crore in the quarter ended June 30 out of a gross revenue of Rs 268,213 crore.
It was followed by retail at Rs 58,569 crore and digital services at Rs 28,511 crore. Earlier this week, Reliance announced that it is acquiring a majority stake in California-based solar energy generation software developer Sense Hawk for $32 million (Rs 256 crore).
Textile Ties
- Shubhalakshmi Polyesters acquired for Rs 1,592cr
- This is its first acquisition in the traditional textile manufacturing business by RIL after purchasing 37.7% of Alok Industries in 2020
- RIL holds a little over 40 per cent of the company
