Kitex Garments Limited Holds Shareholder Meeting on Scheme of Arrangement with Kitex Childrenswear Limited

Kitex Garments Limited Holds Shareholder Meeting on Scheme of Arrangement with Kitex Childrenswear Limited​

Kitex Garments Limited has released an Addendum regarding the notice for its Equity Shareholders and Unsecured Creditors, convening a meeting set for July 24, 2026. The meeting is scheduled to address the Scheme of Arrangement between Kitex Childrenswear Limited (KCL) and Kitex Garments Limited (KGL), as directed by the National Company Law Tribunal, Kochi Bench.

The Addendum provides additional details on the scheme, which involves the consolidation of KCL's Textile Business Division into KGL. This move aims to facilitate focused growth and operational efficiencies for both entities in the infant garments industry. The meeting is being held through Video Conferencing (VC) or other Audio Visual Means (OAVM).

Objective and Rationale of the Scheme​

The primary objective of the scheme is to consolidate the Textile business division of KCL into KGL, enabling KCL to concentrate on its other core activities.

The rationale states that the distinct risks and growth involved in each undertaking—the Textile Business Division and Remaining Business of KCL—require segregation. Combining similar activities under a single entity seeks to optimize operations, achieve economies of scale, and create operational efficiency. This restructuring is intended to provide greater flexibility and liquidity for shareholders while insulating businesses from one another.

Kitex Garments Limited (KGL) serves as a major global player in the infant garments sector, exporting products to top customers like William Carters and Gerber. The scheme aims to help KGL expand its market share by absorbing the textile manufacturing division of KCL.

Financial Overview and Status​

The transaction involves the transfer of all properties and liabilities related to the Demerged Undertaking (KCL's textile business) to the Resulting Company (KGL). All equity shareholders of KCL as of May 29, 2026, are set to become shareholders of KGL via a proportionate issuance of new equity shares.

Financial statements certified by CYRIAC & ASSOCIATES reflect the status of the companies. As of December 31, 2024, the net worth details for both entities were recorded as follows:

Operational and Market Projections​

Financial forecasts related to the scheme, presented in INR crores, indicate robust growth projections for both companies. The following table outlines key financial metrics for KGL:


For Kitex Childrenswear Limited (KCL), key operational projections are presented below:

Valuation Metrics​

Independent valuation assessments for comparable companies involved in the scheme include:

Forward EV/EBITDA Multiple (FY26):

Forward P/E Multiple (FY26):

Additional Information Details​

The Addendum includes a list detailing the additional information submitted to the National Stock Exchange of India (NSE). This checklist includes:

• Details of assets, liabilities, revenue, and net worth for both companies pre and post the scheme, along with a history write up certified by a Chartered Accountant.
• A list of comparable companies used for the multiple method valuation.
• Share Capital built-up details for Kitex Childrenswear Limited.
• Revenue, PAT, and EBIDTA details for all entities involved in the scheme across relevant years, including justification for margin ratios.
• Confirmation that no action is pending by any Government or Regulatory body against any entity involved in the scheme over the recent eight years.

MODIS Stock Price Movement​

Today, investors saw shares of Modis Navnirman Limited rise in the post-market session, closing at ₹348.60 after gaining 1.50%. The equity traded within a tight intraday range, pulling back from a low of ₹343.95 to reach a day high of ₹355.95.