Vishal Fabrics Limited, a leading player in the textile industry, has recently announced a significant development in its business portfolio. The company has acquired 528,100 equity shares of Nandan Industries Private Limited (NIPL), raising its stake from 23.17% to 35.41%. This acquisition, valued at ₹6.49 crore, was completed on April 28, 2025, and marks a key step in Vishal Fabrics' continued focus on expanding its operations within the textile sector.

Background on the Acquisition: Nandan Industries Private Limited (NIPL) is a well-established entity in the textile sector, involved in the manufacturing, weaving, bleaching, dying, processing, mercerizing, printing, and trading of cotton and other fabrics. With a turnover of ₹226.04 crore for the financial year 2023-24, NIPL is a significant player in the textile business. The recent acquisition aligns with Vishal Fabrics' long-term vision to strengthen its position in the textile industry and build synergies with NIPL's operations.

The acquisition also falls within the category of related-party transactions, as NIPL has been an associate company of Vishal Fabrics since March 29, 2024. The promoters and the promoter group of Vishal Fabrics have an interest in this transaction, which was completed at an arm's length price, ensuring transparency and compliance with regulatory requirements.

Transaction Details: The acquisition of 528,100 equity shares at a price of ₹123 per share was based on a valuation report, with the total consideration amounting to ₹6.49 crore. As a result of this transaction, Vishal Fabrics now holds 35.41% of the equity share capital in Nandan Industries, increasing its influence and control over the company's operations. This move is expected to contribute positively to the overall growth strategy of Vishal Fabrics, particularly in enhancing its textile manufacturing capabilities.

Rationale Behind the Acquisition: The primary objective behind this acquisition is to further develop and enhance the business operations of both companies. By increasing its stake in Nandan Industries, Vishal Fabrics aims to solidify its position in the highly competitive textile market and capitalize on the synergies that can arise from greater collaboration with NIPL. Additionally, the acquisition is seen as a strategic move to strengthen the financial and operational capabilities of both companies, enabling them to better compete in the global market.

Industry Context: The textile industry in India is one of the largest and most diversified sectors in the country, contributing significantly to the national economy. With the increasing demand for high-quality fabrics and textiles globally, companies like Vishal Fabrics and Nandan Industries are well-positioned to leverage their expertise and expand their market share. The acquisition is expected to enable both companies to scale up their production and meet the growing demand for textile products in domestic and international markets.

Regulatory Compliance: The transaction complies with the necessary regulatory frameworks, including the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. Vishal Fabrics has made the required disclosures under Regulation 30, providing transparency and clarity about the acquisition process. The company has also outlined the key details of the acquisition in the annexure, which includes information about the entity acquired, the nature of the transaction, and the strategic rationale behind the move.

This acquisition is part of Vishal Fabrics' broader strategy to build a stronger, more diversified portfolio, enhancing its presence in the textile industry while contributing to India's growing textile manufacturing hub.

Conclusion: Vishal Fabrics Limited's increased stake in Nandan Industries signifies a major milestone in the company’s growth trajectory. The strategic acquisition will not only bolster Vishal Fabrics' position in the textile sector but also create new opportunities for expansion and innovation. The increased stake in NIPL demonstrates the company’s commitment to enhancing its business operations and market leadership. Investors and stakeholders are optimistic about the potential benefits this acquisition will bring, as Vishal Fabrics continues to evolve and expand in the highly competitive textile industry.

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