Forbes Gokak demerges textile division

Forbes Gokak is down almost 12%, as it started trading on a demerged basis. The demerged textiles division will be an unlisted company - Gokak Textiles , reports CNBC-TV18.

Analysts said that the stock is soft today, as the company has demerged its textile business. The demerged entity, Gokak Textiles, will be listed on the bourses. However, the process will take one or two months time. The shares will be allotted on September 28. The ratio was such that for two shares of the erstwhile Forbes Gokak, shareholders got one share in Gokak Textiles.

Forbes Gokak is into a lot of diversified businesses like business automation, contract manufacturing, engineering and logistics services. It was into textiles before, until it was demerged.

In terms of revenues, it contributed about Rs 350 crores in FY07 and in terms of PBIT about Rs 7 crores. If you put that in percentage terms, about 50% of FY07 revenues came from its textiles division and PBIT would be 30%.

The company also transferred about Rs 116 crore, as capital from its treasury, to its textile division. This will be used for operational and working capital needs. The division is in the process of an upgradation and modernisation, 80% of which is complete as of date and has a capacity of up to 1.3 lakh spindles.