The Mumbai-based readymade garments manufacturer Mudra Lifestyle Ltd (MLL) has announded the financial closure for its second phase of expansion project at in Tarapore, Maharashtra. Four subsidiary banks of State Bank of India (SBI) have agreed to avail loan to the tune of Rs 101 crore to part fund the project while the remaining Rs 34 crore of the total project cost of Rs 135 crore will funded through internal accruals.
State Bank of Patiala has agreed to lend Rs 31 crore while State Bank of Hyderabad, State Bank of Indore and State Bank of Travancore are ready to finance Rs 20 crore, Rs 25 crore and Rs 25 crore respectively. All these finances will be made available to Mudra before the end of the current fiscal year.
As on March 31, 2008, the company had a total debt of Rs 155.37 crore having a debt equity ratio at 0.93 per cent (0.48 per cent). However, the ratio has improved significantly from the level of 3.44 per cent in the financial year 2003-04. With the current debt, the company’s debt equity ratio is likely to rise significantly 0.53 per cent.
Engaged primarily into the processing, weaving and garmenting of tops (shirts and other fashion wears) into the local market, MLL is also entering into bottom (trousers) market to serve the existing customers.
The second phase of company’s expansion will add processing capacity of 40,000 metres per day and weaving capacity of 10,000 metres per day. The company proposes to add 44 looms and additional processing machines for which it has already placed orders worth Rs 80 crore to its existing European machinery suppliers.
One of the biggest players in shirtings, Mudra supplies its shirts to almost all leading brands on the domestic as well as international markets that include Wal-Mart, JCPenny, Rip Zone, Primetex, Albacco, Allen Flusser, American Models, American Julliet, Reliance, Raymonds, Killer, Lee and Madura Garments.
In the first phase of expansion, the company added 84 weaving machines to its existing 177 while the processing capacity would be enhanced up to 185,300 metres per day from the existing facility of 80,000 metres per day.
Garment manufacturing capacity increased to 35,500 pieces per day from 10,500 pieces per day. In addition, Mudra added up a 2,000-kg per day yarn dyeing facilities to make the company fully integrated.
With the second phase of expansion is set to become operational by September 2009, the company estimates turnover to rise to Rs 550 crore in 2009-10 and Rs 700 crore the following year against the estimates of Rs 300-325 crore during the current fiscal. Similarly, the net profit is expected to remain stagnant at Rs 23 crore during the current which will rise to Rs 45 crore in 2010-11.
Share price of the company fell marginally 0.51 per cent early Monday to trade at Rs 13.75 on the BSE.