The Hindu Business Line : The Shirt Company plans IPO to fund expansion

THE Shirt Company (India) Pvt Ltd is following the lead of garment makers such as Gokaldas Exports and Provogue by seeking to come out with an initial public offering (IPO) in the next couple of months.

The garment exporter and licensee of Barbie in India is hoping to raise Rs 45 crore from the market to set up a textile processing mill and garment unit in Navi Mumbai.

The move will dilute the promoters' stake by 30 per cent.

According to Mr Shivanand B. Shetty, Chairman, The Shirt Company (India) Pvt Ltd, the textile-processing mill will have printing, dyeing and bleaching facilities. The mill will manufacture about 8 lakh metres of fabric a month and the company will increase productivity by adding another 3-4 lakh garments a month.

The mill is expected to replace 80 per cent of the company's fabric imports.

While a number of manufacturers are looking to move to Gujarat and areas such as Daman to lower their costs of operation, Mr Shetty is clear that Navi Mumbai offers quality infrastructure and will reduce delivery times considerably.

He said that in the production of clothing vis-à-vis China, India lost out because it could not match China's considerably lower delivery schedules. With the mill at Navi Mumbai having port and air links nearby, Mr Shetty estimated that his delivery time would be substantially reduced.

Of the Rs 45 crore that will be brought in by the IPO, Rs 20 crore will go towards setting up the mill and the garment unit with about 500 sewing machines. The rest is expected to go towards working capital costs. The plant is expected to be operational by October 2006.

The company is also close to finalising a deal with Mattel where the two will set up 30 Barbie stores that will stock `Barbie' clothes for children and accessories.

According to Mr Shetty, currently there are about 170 shop-in-shops and stores in malls around the country selling Barbie products. He said that in the first year of business, the Barbie stores had notched up sales of Rs 6 crore and the company hopes to more than double this figure in 2005-06.

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