Shares of Indian textile exporters such as Gokaldas, Trident, and Welspun surged up to 14 percent on Monday, as mounting financial and administrative troubles faced by Bangladesh's garment companies raised expectations of manufacturing orders shifting to India.
Bangladesh's The Business Standard reported that the country's interim regime plans to sell ownership of 32 loss-making garment companies under the Beximco Group, in order to address ongoing workers' protests over unpaid wages and allowances.
The decision follows the arrest of Salman F Rahman, Vice-Chairman of Beximco and a former adviser to ex-Prime Minister Sheikh Hasina, which has exacerbated financial difficulties for the group.
Trident Ltd, a Punjab-based integrated home textile giant was among the top gainers in Monday's trading session. It saw its shares soar 13.96 percent to an intraday high of Rs 39.27 on the NSE. The stock has been on an upward trajectory over the past two sessions, buoyed by strong market sentiment.
Himatsingka Seide Ltd, a global player in integrated textiles, hit a 52-week high of Rs 211.95, up 8.79 per cent. Investors showed confidence in the company's prospects as Bangladesh’s textile woes deepened.
Gokaldas Exports climbed 8 percent to Rs 1,050, while Welspun Living rose 6.6 percent to an intraday high of Rs 175. Both stocks gained on expectations of capturing a larger share of international orders amid the uncertainty in Bangladesh.
The Beximco Group comprises 169 companies, and is reportedly looking to sell 32 entities classified under Category B, primarily involved in textiles and garments. These sales aim to clear debts owed to Janata Bank and IFIC Bank, as per local reports.
Bangladesh is a key player in the global garment trade, with clients including Walmart and H&M being major players, however the segment is witnessing growing instability in its textile sector, prompting speculation that major international fashion brands may divert their orders to India.
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