Century Textiles & Industries Limited has announced its decision to subscribe to the rights issue of HP MMF Textiles Limited (HP MMF), a wholly owned subsidiary engaged in the manufacturing of manmade and natural fibers. This move will see an investment of INR 10 lakh, ensuring that HP MMF remains entirely owned by Century Textiles. The proceeds will be utilized for general and operational expenses, aiding the subsidiary’s future growth.

Details of HP MMF and Rights Issue Subscription

HP MMF, incorporated on June 24, 2022, has not yet commenced production. As a result, its turnover for FY 2023-24 and FY 2022-23 stands at Nil. The rights issue is being subscribed to as a cash consideration, with the transaction expected to be completed by March 31, 2025.

Since HP MMF is a wholly owned subsidiary, this transaction is categorized as a related party transaction. However, it is being carried out at arm’s length, ensuring compliance with financial and regulatory norms. Additionally, Century Textiles promoters, Mr. Kailash Kumar Agarwal and Mr. Raghavkumar Agarwal, serve as Directors in HP MMF but hold no other stake beyond the company’s ownership structure.

Industry and Business Impact

HP MMF operates within the textile industry, an essential sector in India’s economy. The move to invest in manufacturing of manmade and natural fibers aligns with Century Textiles' long-term strategic goals. This rights issue is crucial for scaling operations and ensuring seamless production commencement.

Financial and Strategic Implications

The company has agreed to subscribe to equity shares worth INR 10 lakh, which will assist HP MMF in covering its initial operational costs. The ownership structure remains unchanged, with HP MMF continuing as a wholly owned subsidiary.

No governmental or regulatory approvals are required for this acquisition, allowing a swift and seamless transaction process.

Future Outlook

With HP MMF poised to commence production, this financial backing will provide the necessary support for the company’s future expansion and market positioning. As Century Textiles continues to strengthen its textile manufacturing capabilities, this investment underscores its commitment to business growth and innovation in the sector.

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This investment by Century Textiles into HP MMF Textiles Limited reaffirms the company’s commitment to strengthening its presence in the textile sector while ensuring sustainable financial growth. Stay tuned for more updates on this and other business developments!