Filatex Fashions charts expansion plan with Rs. 350 cr

Hyderabad: City-based socks manufacturer Filatex Fashions Limited on Tuesday said it will incur a capex of Rs 350 crore for expanding manufacturing plant and enhancing production capacities.

As part of its market consolidation plan, FFL also intends to acquire 51 per cent stake in Srilanka-based apparel maker, Isabella (P) Limited, for a consideration of $7.55 million.

Aimed at garnering higher share in the domestic market, the socks maker said it will add three lakh sft floor space to its current two lakh sft, bringing in more space for adding 500 new machines. This expansion will lead to an increase in its production capacity, from the current seven million socks produced per annum to 30 million. To support their increase production capacity, Filatex informed that it will add 2000 direct jobs.

To achieve its plans, Filatex will look to raise its paid-up capital from Rs 48.40 crore to Rs 250 crore by way of preferential allotment of shares, at various price bands, thereby enabling it to raise about Rs 400 crore. "The combination of organic expansion, strategic acquisition and smart fund-raising exercise shall help FFL achieve a turnover of over Rs 700 crore and PAT (profit-after-tax) of Rs 175 crore in the next 30 months," FFL stated.

The company also informed that it has initiated due-diligence process for acquiring- share subscription of Isabella (P) Limited. "It is the second largest manufacturer of socks and tights in South Asia, with an annual capacity of 48 million pairs. FFL shall achieve strong synergy through this strategic acquisition," the company said.