Gokak Textiles Limited has announced plans to sell its knitwear manufacturing plant in Belagavi, Karnataka, to real estate developer V.G. Parekh & Co for Rs. 19.50 Crores. The decision comes as part of the company's strategy to address the declining performance of its knitwear business in recent years.

Plant Details and Valuation

The knitwear plant, established in 1995, is located on 15.65 acres of freehold land at Bagalkot Road, Village Marihal, District Belagavi, Karnataka. As of May 15, 2025, the plant was valued at Rs. 21.49 Crores, including land, buildings, and machinery.

Financial Impact

For the fiscal year 2024-2025, the knitwear business contributed Rs. 505.47 lakhs to Gokak Textiles' total revenue, representing 5.17% of the company's operations. However, the unit reported a negative net worth of Rs. 4,115.21 lakhs, accounting for 26.02% of the company's overall negative net worth of Rs. 15,815.77 lakhs as of March 31, 2025.

Operational Changes

Gokak Textiles has already taken steps to streamline its operations. In 2015-16, the company shifted specialized garmenting machines, including fabric dyeing, knitting, and other miscellaneous equipment, to its Mills Division in Gokak Falls, Karnataka. Currently, only cutting and stitching operations remain at the Marihal plant.

Transaction Details

The sale agreement with V.G. Parekh & Co was entered into on September 09, 2025. The transaction is expected to be completed by January 2026, subject to shareholder approval through a postal ballot as required under Section 180(1)(a) of the Companies Act, 2013.

Buyer Information

V.G. Parekh & Co, the buyer, is a real estate development and leasing company based in Vijayapura, Karnataka. The company is not related to Gokak Textiles' promoter group or any group companies, ensuring an arm's length transaction.

Regulatory Compliance

Gokak Textiles has confirmed that the sale is outside the Scheme of Arrangement and that the company will comply with the requirements of Regulation 37A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations before finalizing the sale.

This strategic move by Gokak Textiles aims to address the challenges faced by its knitwear business and potentially improve the company's overall financial position. Shareholders will play a crucial role in the decision-making process through the upcoming postal ballot.

Gokak Textiles Limited , a prominent textile manufacturer, has reported a significant incident at its Solar Power Plant in Gokak Falls, Karnataka. On May 13, 2025, the plant experienced a transformer failure due to heavy lightning and grid supply failure, impacting half of its total power generation capacity.

Incident Details

The company disclosed that both 25 MVA transformers (PTR-1 & PTR-2) at the solar plant tripped during the incident. While PTR-1 was successfully restored, PTR-2 suffered internal damage to its Y-phase winding and coils, necessitating factory repairs. As a result, 20MW of the plant's total 40MW capacity has been affected.

Impact on Operations

The transformer failure has led to a 50% reduction in the solar plant's power generation capability. This incident may potentially impact the company's operations and energy costs in the short term, depending on the duration of the repairs and the extent of the damage.

Insurance Coverage

Gokak Textiles has reported that it maintains adequate insurance coverage for such incidents. The company's comprehensive insurance policy includes:

This coverage is expected to mitigate the financial impact of the incident on the company.

Response and Next Steps

The company has taken prompt action in response to the incident:

1. Insurance companies and surveyors have been notified of the damage.
2. Efforts are underway to restore normal operations at the solar plant.
3. A full assessment of the damages is being conducted to determine the extent of the impact and required repairs.

Gokak Textiles Limited is working diligently to minimize disruptions to its operations and restore full power generation capacity at its solar plant. The company's proactive approach in maintaining comprehensive insurance coverage demonstrates its preparedness for such unforeseen events.

Investors and stakeholders will likely be watching closely for updates on the repair timeline and any potential impact on the company's financial performance in the coming quarters.