Yarn Syndicate Limited (YSL), a BSE-listed company that exports and trades yarn, raw cotton, and fabrics, has acquired a 51% stake in Stitched Textiles Limited, the owner of India’s leading men’s wear fashion brand, Barcelona.
YSL plans to use Stitched Textiles’ strong retail presence to expand its own business into the retail sector. The acquisition also gives YSL access to Stitched Textiles’ joint venture with Viru Retail Private Limited, which produces the VS-by Virendra Sehwag brand.
Promoters of YSL stated, “We are very pleased with this business strategy which will create a win-win situation for all the stakeholders, henceforth, enabling us to raise our outlook for the future years. Our expansion into the retail segment is a milestone moment in the growth of YSL as we will introduce our world-class garments through the retail medium.”
The promoters further stated that “This investing strategy will assist YSL by entering into the new business dimension, subsequently leading the Company to a new direction of growth”.
To finance their ambitious expansion plans, YSL’s promoters are planning to raise funds through a rights issue. This may result in some dilution of the promoters’ stake, but they believe that it is necessary to make the company debt-free, fulfil all its obligations, and achieve its retail expansion goals.
This rights issue is a significant step for YSL as it embarks on the next stage of its growth journey. The company is confident that the opportunities ahead are attractive and that this plan of action will help it to scale up and deliver higher and more sustainable returns.
Yarn Syndicate shares hit their upper circuit limit of Rs 39.65 today, but ended the trading session at their lower circuit limit of Rs 35.89, down 5%.
Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.