Welspun in bedsheet spread

Welspun's board has also chalked out the doubling of the company's existing terry towel line at Vapi to around 23,000 tonne per annum at an estimated Rs 200 crore.

B K Goenka, vice chairman & managing director, Welspun India, told Business Standard, "We are targeting to become world 3rd largest home textile company, and after the capacity expansion is completed in the next 1 and half years, we hope to achieve that target."

The company is targeting revenues of Rs 750 crore, post-expansion from Rs 300 crore at present.

The funds for the expansion will be raised through debt as well as equity, with the board proposing to raise around Rs 100 crore through issue of securities, the modalities of which are yet to be finalised.

Welspun had recently bid for the US-based Pillow Tex, world's 3rd largest home textile company with a annual terry towel capacity of 30,000 tonne, but has lost the bid to much higher offer.

Welspun's board had proposed to raise Rs 345 crore for this acquisition, which has now been cancelled.

"We felt that the matching the highest bid for Pillow Tex was not a viable decision, therefore that investment plan has been shelved," said Goenka.

The bid for Pillow Tex was awarded to a consortium of four companies, with the highest offer of an estimated $128 million.

Talking about the capacity expansions, Goenka said "There is a huge market potential in the bed linen market, therefore we felt that we should venture into this segment. We are hoping to leverage on the success of our terry towel division."

The capacity expansion in the terry towel segment will include the setting up of a new line, which will result in doubling of current capacity of 10,800 tonne to around 23,000 tonne, along with de-bottlenecking of the existing capacities."