GHCL Textiles, which houses the spinning business of GHCL Limited, slumped to a 5 percent low of Rs 71.25 on BSE, hitting the lower circuit, on June 12 after the stock got listed on the bourses after demerging from the parent company.
GHCL is a chemical company. It completed the demerger of its textile unit citing “vastly different” product offerings and risk-and-return profile.
Demerger was aimed at unlocking and maximising value for all stakeholders, focusing on operations and customers, bringing forth focused leadership and addressing independent opportunities with prudent capital allocation, it said.
“Having distinct operating entities shall allow both businesses to prioritize relevant focus areas and respond to market opportunities in a nimbler manner. This demerger is envisaged to create strong independent businesses uniquely positioned to enhance stakeholders' value over time," GHCL Limited Managing Director RS Jalan said.
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Following the demerger, GHCL shareholders got shares of GHCL Textiles in the ratio of 1:1, one share of Rs 2 each for every share held in GHCL of Rs 10 face value. The demerged will lead to no change in the shareholding pattern of GHCL Textiles. The company will assume all the assets and liabilities of the spinning business.
GHCL was trading at Rs 489 on BSE, down 0.16 percent.
GHCL Limited manufactures of soda ash (anhydrous sodium carbonate), which is a major raw material for detergents and glass industries, and sodium bicarbonate (baking soda). Through a demerger, it separated its spinning business, which will continue to produce multiple varieties of fibre (yarn), sold to domestic consumers as well as exported worldwide, it said.
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