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ReturnIndian textile sector set for transformation
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PublishDate：
2007-08-23 15:45:00
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Mumbai: Slowly, the global investors are finding a new area to put their money in India. The textile industry is emerging as a new arena for foreign players to invest.
So far insulated from consolidation, Indian textile industry is on the verge of a transformation.
A clear hint to this effect came from the deal between the Blackstone Group and Gokaldas Exports at Rs 660 crore. That was the beginning of an era of consolidation in textiles sector. The deal is a clear indication that foreign funds have smelt the phenomenal growth prospects in the industry.
With growing competition from neighbouring countries like Bangladesh, Sri Lanka and Vietnam in the export markets, consolidation on a larger basis with larger capacities is the need of the hour.
Analysts said further consolidation of the industry is very much possible. They indicated that more private equity players will come into the sector now.
Due to rupee appreciation and slow down in US market (the largest export market of the country), Indian exporters are feeling the pinch.
However, at the same time newer markets are also being explored. As industry is so fragmented, smaller players will go for consolidation as creating larger capacity is the requirement to boost exports. In fact, this is the time to consolidate, opined market analysts.
Though the US and Europe would continue to remain the traditional markets, textile industry is venturing into other regions too.
Africa, West Asia, Russia, Latin America and Australia are on the radar. According to industry experts, private equity players such as Merill Lynch and Goldman Sachs might be in the run to pick up stake in textile players.
However, these players with financial muscles might not go for small-sized deal of less than $100 million.
Smaller firms may get consolidated into bigger ones and this could open the door for them to attract foreign investment.
Source: Industry Website
So far insulated from consolidation, Indian textile industry is on the verge of a transformation.
A clear hint to this effect came from the deal between the Blackstone Group and Gokaldas Exports at Rs 660 crore. That was the beginning of an era of consolidation in textiles sector. The deal is a clear indication that foreign funds have smelt the phenomenal growth prospects in the industry.
With growing competition from neighbouring countries like Bangladesh, Sri Lanka and Vietnam in the export markets, consolidation on a larger basis with larger capacities is the need of the hour.
Analysts said further consolidation of the industry is very much possible. They indicated that more private equity players will come into the sector now.
Due to rupee appreciation and slow down in US market (the largest export market of the country), Indian exporters are feeling the pinch.
However, at the same time newer markets are also being explored. As industry is so fragmented, smaller players will go for consolidation as creating larger capacity is the requirement to boost exports. In fact, this is the time to consolidate, opined market analysts.
Though the US and Europe would continue to remain the traditional markets, textile industry is venturing into other regions too.
Africa, West Asia, Russia, Latin America and Australia are on the radar. According to industry experts, private equity players such as Merill Lynch and Goldman Sachs might be in the run to pick up stake in textile players.
However, these players with financial muscles might not go for small-sized deal of less than $100 million.
Smaller firms may get consolidated into bigger ones and this could open the door for them to attract foreign investment.
Source: Industry Website
