Arvind demerger
National Company Law Tribunal (NCLT) on 26-10-28, approved the scheme of demerger of Arvind Limited into separate entities, branded apparel under Arvind Fashions and engineering businesses under Anveshan Heavy Engineering. After the Arvind Limited Demerger, the two entities will be separately listed on the stock exchanges.
Arvind Limited has fixed 29th November 2018 as the record date for this Demerger. The Shareholders on this RD shall be will be entitled for allotment of :
a) 1 equity share of INR 4 of Arvind Fashions Limited for every 5 (Five) equity shares of INR 10 held in Arvind Limited;
b) 1 equity share of INR 10 of Anveshan Heavy Engineering Limited for every 27  equity shares of of INR 10 held in Arvind Limited.

Financials of these entities for FY18 is as follows:
EntityFy18 RevenuesEBITAEBITA Margin
Arvind Ltd.675067710.03%
Arvind Fashions Ltd.38522356.10%
Anveshan Heavy Engineering2245424.11%

About Arvind Limited
  • Arvind Limited is a textile manufacturer and the flagship company of the Lalbhai Group headquarters in Ahmedabad, Gujarat, India.
  • Arvind is into areas like
    • Denim
    • Woven Fabrics
    • Knits Fabrics
    • Garment Exports
    • Arvind Brands
    • Voiles
    • The Arvind Store & Maga Mart Stores
    • Engineering
  • The company has its two manufacturing facilities in Naroda and Santej in Gujarat.  Arvind Limited has also moved into  Advanced Materials (Technical Textiles). 
  • It manufactures cotton shirting, denim, knits and bottomweight fabrics.
  • The companys own product brands include Flying Machine, Colt, Ruggers, Excalibur amongst others while its licensed product brands have big global names like Arrow, Gant, Izod, Elle, Cherokee, US Polo 
Arvind Limited: Financial Summary & Price Chart
ParticularsFigures
Market Cap (in ₹ Cr.)8,250 Cr.
52 weeks High / Low  477.85 / 289.15
Earning Per Share (EPS TTM) (₹)7.72
Price To Earnings (P/E) Ratio30.21
Book Value Per Share (₹)121.69
Price To Books (P/B) Ratio2.60
EBIT Margin (%)9.46
PAT Margin (%)4.19
ROCE (%)10.2
Debt to Equity (D/E) Ratio0.81
Arvind Limited demerger price chart


Comments & Assessment
    • As a results of Arvind Limited Demerger, Arvind Fashions and Anveshan may also get independently listed in Feb 2019
    • As per Management, Branded apparel segment which is currently in Net loss  is likely to deliver  20 percent plus growth momentum and steady margin expansion is expected  
    • The company has strong brand portfolio of Arrow, US Polo Association, Flying Machine and Tommy Hilfiger, which reported healthy 16 per cent growth for the quarter.
    • The company had started multiple Greenfield sites in Gujarat, Jharkhand, AP and Karnataka which will expand its garmenting capacity almost 3x  to 90 million pieces over next three years.
    • Arvind share price took a hit on recent times due o general market conditions and not so impressive Q2Fy19 results
    • There is a possibility that Arvind Limited Demerger  could unlock value for the shareholders over the medium term. Please do your own diligence in this regard. 
Standard disclaimer:  I am not a SEBI registered analyst and above analysis is for educational purpose only. I may have vested interest in every stock I discuss and my views may be biased. Please do your own due diligence as stock market investments have high degree of inherent risk.