Kitex stock price skyrockets over Telangana investment
From July 9th, the day of its investment announcement, until July 13th, the company’s share value has skyrocketed consistently
Hyderabad: Kerala-based textile company Kitex Garments, which recently committed Rs 1,000-crore investment in Telangana, has seen a significant spike in its stock value post its announcement. The company touched its 52-week (one year) high of Rs 224.45 on Thursday, while closing the trading session at Rs 183.65. The company’s stock price settled at Rs 175.35 on Friday.
From July 9th, the day of its investment announcement, until July 13th, the company’s share value has skyrocketed consistently. The share, which was valued at Rs 109.60 on July 8 shot up to Rs 185.50 by July 13, recording a surge of 69.25 per cent adding Rs 75.90 to the stock value.
Same day, the Bombay Stock Exchange (BSE) sought clarification from Kitex with reference to the rapid movement in its stock price, following which its company secretary & compliance officer Mithun B Shenoy responded saying that the movement in the share price might be due to the announcement of Kitex to invest in Telangana.
Kitex in its official statement shared with the BSE said, “The State of Telangana ranks among the highest in ease of doing business and is an ideal destination for apparel manufacturing. It is the third largest producer of cotton in India, has sufficient infrastructure facilities, and has investor-friendly State policy, thereby very conducive for industrial growth.”
“With liberal government policy, availability of raw material and various incentives offered by the State, the company expects to reduce its operating cost, shorten payback period and drive profits. The company also expects to fast track its investment with active State government support,” it added.
Kitex will invest in a textile unit at Kakatiya Mega Textile Park in Warangal in the State in the first phase, and expects to add 4,000 jobs over the next two years through this investment. The State government arranged a special chartered flight to fly in the company’s delegation led by Jacob. The development followed Kitex evincing keen interest in investing in Telangana, and the meeting between the State Industries Minister K T Rama Rao and the company management where various aspects of the investment were discussed.
It is pertinent to note that the company had recently announced that it was withdrawing from a proposal to invest Rs 3,500 crore to build an apparel park and three industrial parks in Kerala, which could provide jobs to 35,000 people.
Kitex which operates in the apparel and accessories category clocked a net profit of Rs 59.90 crore and revenue of Rs 455.39 crore in FY 2020-21.
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