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Gokaldas Exports (GEX) will invest up to Rs 350 crore in Bombay Rayon Fashion Textiles (BTPL) by subscribing through optionally convertible debentures (OCD), the company said in a regulatory filing. 

In the first tranche, GEX will subscribe to Rs 50 crore worth of OCDs, with the remaining to be subscribed later depending on funding requirements. GEX will also explore a possible merger by June 30, 2025, for a total consideration of Rs 587.50 crore, depending on the fulfilment of some regulatory and operational milestones. 

Bombay Rayon will mainly use these funds for working capital needs and a small portion for capital expenditures. 

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Through its investment in Bombay Rayon, GEX aims to create an end-to-end supplier model for its products and turn into a self-reliant entity in fulfilling its raw material requirements. GEX is banking on BTPL’s specialised prints and yarn-dyed fabrics, which support GEX’s production of knits, wovens, and all fibre types. 

Investment in Bombay Rayon allows GEX to “integrate backwards into sourcing high-quality fabric at competitive prices by which the Company expects to garner a significant competitive advantage,” the company said in a regulatory filing filed with BSE. 

Bombay Rayon, involved in textiles manufacture and sale, also operates a dyeing, printing and fabric processing facility in Tarapur, Maharashtra. It logged a revenue of Rs 473.88 crore in FY 2023-2024, a decline from Rs 635.9 crore reported a year ago.

GEX logged a consolidated profit after tax of Rs 44.3 crore and a total income of Rs 818 crore for the quarter ended March 31, 2024. In the corresponding period, in 2023, it logged an after-tax profit of Rs 47.2 crore and earned a total income of Rs 530.1 crore. 

GEX shares closed 4.83% higher at Rs 872 apiece on NSE on Thursday.