Kitex Garments Limited has filed an addendum to the notice for its equity shareholder meeting scheduled on July 24, 2026, regarding the scheme of arrangement with Kitex Childrenswear Limited. The meeting, authorized by the National Company Law Tribunal, Kochi Bench, aims to consolidate the textile business division of Kitex Childrenswear Limited into Kitex Garments Limited. This strategic move is intended to facilitate focused growth, operational efficiencies, and better market share in the infant garment manufacturing sector.

The scheme involves the demerger of the textile undertaking from Kitex Childrenswear Limited and its merger into Kitex Garments Limited. As consideration, Kitex Garments Limited will issue new equity shares to the shareholders of Kitex Childrenswear Limited based on a share entitlement ratio. The transaction is structured to optimize business operations and achieve economies of scale by combining similar activities under a single entity.

Financial Projections and Valuation

The addendum provides detailed financial projections for the resulting entities. For Kitex Garments Limited, revenue is projected to rise from ₹1,347 crore in FY26 to ₹2,460 crore by FY30, with Profit After Tax (PAT) expected to reach ₹738 crore in the same period. The demerged undertaking (KCL-DU) anticipates revenue growing from ₹820 crore in FY26 to ₹1,322 crore in FY30.

Valuation metrics based on comparable companies, including Gokaldas Exports Limited and S.P. Apparels Limited, indicate an average forward EV/EBITDA multiple of 12.01 and a forward P/E multiple of 19.7 for FY26.

Post-Transaction Structure

Upon completion of the scheme, the shareholding pattern of Kitex Garments Limited will change significantly. Promoters' holding is expected to increase to 59.46%, while public shareholding will dilute to 29.65%. Kitex Childrenswear Limited's stake in Kitex Garments Limited will reduce from 15.92% to 10.89%.

The net worth of Kitex Garments Limited is projected to increase to ₹1,28,775.19 lakh post-arrangement, while Kitex Childrenswear Limited's net worth will adjust to ₹8,826.31 lakh following the demerger. The company confirmed that the scheme is in compliance with applicable securities laws and that no regulatory actions are pending against the involved entities.

Source: https://lodr-files.dhan.co/lodr-inputs/Company/INE602G01020/2e92aff6a80c4067.pdf

Kitex Garments has appointed Mr. Bijoy Philipose as a Non-Executive Independent Director on its Board, effective June 30, 2026. The appointment was unanimously approved by the Board based on the recommendation of the Nomination and Remuneration Committee. This move strengthens the company's governance structure with the addition of an independent voice for a five-year term, subject to shareholder approval.

The Board confirmed that Mr. Philipose satisfies the criteria of independence as prescribed under the Companies Act, 2013 and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The company verified that he is not debarred from holding the office of Director by any order issued by SEBI or other authorities. The disclosure was made in compliance with Regulation 30 of the Listing Regulations and specific circulars issued by the National Stock Exchange of India Limited and BSE Limited.

Mr. Bijoy Philipose holds a BSc in Computer Science from Bharatiar University and a Masters in Computer Application from Madurai Kamaraj University. He is currently the promoter and Managing Director of Sevana Electrical Appliances Private Limited, a company engaged in manufacturing packaging machines, instrumentation and control panels, domestic appliances, and tools. The company disclosed that Mr. Philipose is not related to any of the existing Directors of Kitex Garments.

The Board meeting, where this appointment was finalized, commenced at 3.30 p.m. IST and concluded at 4.30 p.m. IST on June 30, 2026. The regulatory filing included an annexure detailing the director's profile and the specific terms of his appointment.

Key Appointment Details