MUMBAI: The Mafatlal Group has decided to merge its subsidiaries Mafatlal Denim (MDL) and Mishapar Investments into Mafatlal IndustriesBSE 0.95 % for better operational efficiencies and faster expansion.
According to the scheme of amalgamation sanctioned by the Bombay High Court and Gujarat High Court, the country's largest school uniform fabric supplier Mafatlal Industries (MIL) will merge its two entities which will help the company expand its capacity to produce denim and other fabrics at the company's Navsari and Nadiad plants in Gujarat.
"We supply to brands like Wrangler, Lee, Madura brands, Marks & Spencer (M&S) and Killer, among others," said Rajiv Dayal, company's newly-appointed MD and chief executive. "This move will help us offer our entiretextile portfolio to our clients. Globally, there are very few companies who can supply denim as well as textile, and we would be one of them after this merger," he added.
Earlier, Dayal was heading the company's denim business. Founded in 1905, MIL also has a retail chain under the brand name 'Mafatlal Family Shop' with around 100 outlets, which it plans to expand to 150 in the next five years, said a senior official of the company.
Also, it plans to use its over 400 dealers and 35,000 approved retail shops for greater brand push.
The financial performance of Mafatlal Industries has been erratic in the last three fiscals. From a net profit of Rs 52 crore in FY10, the company has reported a net loss of Rs 95 crore FY12. The company's net sales have improved only 3% to Rs 136 crore in FY12 against Rs 132 crore in FY10.
At the end of FY12, the company has a negligible debt of Rs 7.4 crore, which has fallen by 90% on a year-on-year basis.