GHCL is pretty volatile today. It opened almost 5.5% higher at Rs.432 but from there, it slipped down to Rs.393.60, a fall of 4% and is currently the top loser on the BSE.
The punters are booking profit after the company decided to partly divest its home textile business to Indo Count Inds; the spinning unit will stay with GHCL. This unit will be demerged into a separate unit, known as GHCL Textiles. The entire process of demerger is expected to be completed by Sept 2022.
Total sale consideration including various terms and conditions as agreed upon in the BTA stands at a fair valuation of Rs. 596 crore.
The company said that this decision was in line with its intention to focus more on spinning and chemicals business. Home Textiles division was not fully scaled up. Hence, continuation of this division would have led to large investments around product development, marketing, innovation and so on. Cyclicality typical to Home Textiles for GHCL was apparent and impeding build-up of performance momentum The company said that it leveraged the lucrative opportunity at hand to tactically modify its strategy and divested the Home Textiles business to lndo Count Industries.
Indo Count is also currently down in the red at Rs.260 levels, a decline of 2%.