Gokaldas Exports Merges with BRFL Textiles

Recently, Gokaldas Exports Limited (GEL) announced the merger of BRFL Textiles Private Limited (BTPL) with itself, marking a pivotal step in its long-term growth strategy.

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In 2024, GEL had acquired a 19% stake in BTPL then managed by an asset reconstruction company (ARC) and private equity investor as a strategic investment to strengthen its operations. The subsequent merger announcement underscores GEL's intent to capture synergies across the textile and garment value chain while simultaneously providing an orderly exit to the financial investors in BTPL.

BRFL Textiles Private Limited (“Transferor Company” or “BTPL”) is inter alia engaged in manufacturing a wide range of fabrics such as cotton, linen, giza cotton, viscose, polyester, tencel, modal, lycra, along with their blends under our brands, viz. Bombay Rayon, BRFL, LinenVogue - La Classe’, Giza Classe’, Dickens & Browne and others.

BTPL commenced operations in 2020 following the execution of a Business Transfer Agreement with Bombay Rayon Fashions Limited (“BRFL”), pursuant to which the “Tarapur Undertaking” was transferred from BRFL to BTPL for a consideration of ₹630 crore. This slump sale was part of the revival strategy led by JM Financial Asset Reconstruction Company Ltd., which had become the key lender to BRFL through assignment of debt from the consortium lenders.

Subsequently, in 2021, Think Investments (a private equity fund) invested ₹240 crore in BTPL for ~23% equity stake. In FY 2024-25, Gokaldas Exports Limited (“GEL”) further strengthened BTPL's capital structure and integration prospects by investing ₹175 crore through optionally convertible debentures (OCDs). This investment was aimed at securing critical raw materials and enhancing vertical integration, thereby enabling GEL to deliver higher quality and cost-effective solutions at scale.

To streamline merger approval process, the Transferee Company is in the process of shifting its registered office from the State of Karnataka to the State of Maharashtra.