Textiles sector is in a hurry to raise their capital before expiry of Government sponsored Technology Upgradation Fund (TUF) in March 2007.
Around six textile companies have collected over Rs400 crore from market in 2007 and further initial public offerings (IPOs) from House of Pearl Fashions, Hanung Toys, Technocraft Industries, Mudra Lifestyle, Indus Fila, Abhishek Mills, Evinix Accessories and Vijayeshwari Textiles. from the sector are planned.
Textiles firm receive required finance at subsidised interest rate of 5 percent under TUF from special fund created by Government.
Removal of textile quota restrictions under WTO agreement has increased export sales of domestic textile firms.
Many small- and mid-sized textile companies are rushing to the primary market to raise funds to finance their expansion facilities, in order to avail incentives for export promotions in domestic market
Fasiha Shaikh, textile analyst, Angel Broking, said, “The removal of quota restrictions and the domestic retail boom has definitely contributed to the growth of the domestic textile firms in a great way. This in turn has resulted in companies tapping the capital market for raising funds for capacity expansion.”
Experts are of opinion that Government may extend TUFS for a year or two years to boost textile exports
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