In a recent disclosure, textile manufacturer Alok Industries revealed its plans to raise Rs 3,300 crore through the issuance of Non-Convertible Redeemable Preference Shares (NCRPS) to its parent company, Reliance Industries. The announcement comes as part of Alok Industries’ ongoing endeavours to strengthen its financial position and further expand its operations.
Alok Industries, which was acquired by Reliance Industries and JM Financial Asset Reconstruction Company in 2019 through the corporate insolvency resolution process, aims to issue Rs 3,300 crore worth of NCRPS of Re 1 each to Reliance Industries through a private placement mechanism. The issuance will be conducted in one or more tranches.
In a regulatory filing, Alok Industries provided details regarding the NCRPS, stating that they will bear a dividend of 9 per cent per annum on a cumulative basis. Additionally, the shares will be redeemable at par at any time, giving the company the option to repurchase them within a maximum period of 20 years from the date of allotment.
Alok Industries’ decision to raise funds through NCRPS reflects the ongoing support and commitment from its parent company, Reliance Industries. This strategic move is expected to provide Alok Industries with the necessary financial resources to navigate the current challenging market landscape and execute its growth strategies effectively.
Financial figures from Alok Industries’ recently released July-September quarterly earnings report highlighted a 19.99% decline in revenue from operations compared to the previous year, reaching Rs 1,359.02 crore. However, the company managed to narrow its loss from Rs 191.5 crore to Rs 174.83 crore during the same quarter. Notably, the company’s EBITDA more than doubled, reaching Rs 46.18 crore in the quarter compared to Rs 19.22 crore in the previous year.
