Abhishek Mills looking for menswear brand

Abhishek Mills, the Kolhapur-based textile and construction company, is eyeing the branded apparel segment. The company is in talks to acquire a menswear brand for $4 million (Rs 17.12 crore).

The company is slated to invest about Rs 100 crore over the next four years for brand acquisitions and retail expansion with an eye on its international foray as well.

The company, a higher cotton yarn manufacturer, intends to penetrate the booming apparel and organised retail segment.

Ninad Dani, head-marketing, Abhishek Mills told Business Standard, "We are in talks with a formal menswear brand in the premium segment. The move is in line with the company's strategy to be present across the value chain."

Dani mentioned that the said brand's equity with presence in western and Middle East markets will be a viable opportunity for the company to enter the apparel segment.

Stating the rationale for acquiring an international brand, Dani said, "The company intends to penetrate the premium segment, and what constitutes premium in India is not applicable in the international markets." Apart from acquiring brands, the company also plans to manufacture a special range of fabric with colour and design combination that will be unique to the company's brands.

Abhishek Mills intends to position itself as a lifestyle product by launching an umbrella brand with special ranges for different categories.

Initially the company aims to focus on men's formal and casual wear. It plans to open about 60-70 retail outlets over next three years.

According to industry sources the company is estimated to fund the new venture through private equity, promoters holdings and other fund raising avenues.

In financial year 2005-06 the company registered a turnover of Rs 67.74 crore from its textile and infrastructure divisions, which is projected to touch Rs 100 crore in 2006-07.

Recently, the company debuted on the capital market at a discounted price of Rs 91 against the initial offer price of Rs 100. On Tuesday, the company's share price closed at Rs 56 after touching a high of Rs 57 and a low of Rs 52.

As part of its expansion, Abhishek Mills aims to raise its yarn production capacity from 33,120 spindles to 45,120 spindles by January 2008 at its Kolhapur plant.