Varvee Global Limited has received official notification from Infomerics Valuation and Rating Limited regarding the withdrawal of its credit rating. The rating agency has withdrawn the IVR D issuer rating that was previously assigned to the company's bank facilities and fixed deposits, with the withdrawal taking effect immediately.

Rating Withdrawal Details

The withdrawal was initiated following a formal request from Varvee Global Limited through a letter dated July 24, 2025. The company provided comprehensive documentation to support the withdrawal request, demonstrating its compliance with various financial obligations.

Regulatory Communication Process

Infomerics has confirmed that it will follow standard procedures for announcing the rating withdrawal. The rating agency will issue a press release to formally communicate this development to the market and stakeholders. This announcement will be made available to ensure transparency in the rating withdrawal process.

The rating agency has specifically instructed Varvee Global Limited to ensure that the withdrawn ratings are not used for any purpose whatsoever going forward. This directive is part of standard regulatory compliance requirements when ratings are withdrawn.

Future Rating Services

Infomerics has indicated its willingness to provide rating services to Varvee Global Limited in the future should the company require such services. The rating agency has kept the door open for potential future engagement, suggesting that the withdrawal was processed as a routine administrative matter rather than due to any adverse developments.

The communication was signed by Sapna Bagaria, Senior Rating Analyst, and Sandeep Khaitan, Director - Ratings, representing the official stance of Infomerics Valuation and Rating Limited on this matter.

Varvee Global Limited , formerly known as Aarvee Denims & Exports Limited, has reported robust financial results for the second quarter and outlined its strategic transformation during an analyst meeting held on December 18.

Key Financial Highlights

The company's Q2 performance demonstrates significant operational improvements:

Strategic Transformation and Business Model

During the analyst meeting, Chairman & Managing Director Mr. Jaimin Gupta detailed the company's strategic pivot from denim to non-denim fabrics. The transformation involves converting existing 35 million meter denim capacity to non-denim production without significant capital expenditure.

Production and Revenue Model

The company is focusing on job work operations, where customers provide raw materials and VGL handles processing, dyeing, and finishing. This model reduces working capital requirements and maintains higher EBITDA margins of 45-50%.

Operational Excellence and Cost Structure

Key Operational Improvements:

• Debt Elimination: Company achieved zero debt status post-acquisition
• Cost Optimization: Employee expenses decreased by 54.45% year-over-year
• Finance Cost Reduction: Finance costs reduced by 99.99% due to debt-free operations
• Technology Integration: Implemented ERP systems and real-time production monitoring

Customer Base and Market Position

VGL has established a diversified customer portfolio with no single customer contributing more than 15% of sales. The company serves 25-30 customers across the non-denim segment, focusing primarily on the domestic market.

Market Focus Areas:

• Shirting and suiting fabrics
• Cotton pants and formal wear fabrics
• Ladies wear textiles
• Shorts and casual wear materials

Management Vision and Future Plans

Mr. Gupta outlined an ambitious transformation plan to evolve VGL from a textile-focused company to a multi-vertical enterprise. The five-year vision includes expansion into:

Financial Strength and Working Capital

The company's debt-free status provides significant operational flexibility. For scaling to ₹200 crore revenue, management estimates working capital requirements of ₹20-30 crore, which can be funded through banking facilities given the zero debt position.

Balance Sheet Highlights:

• Non-current borrowings: ₹2,290.40 crore (legacy, being addressed)
• Current borrowings: ₹520.10 crore (legacy, being addressed)
• Zero fresh debt post-acquisition
• Strong cash flow generation capability

Management Commentary

Mr. Jaimin Gupta stated during the analyst meeting: "This quarter signals a clear strategic inflection for VGL; a cleaner balance sheet and a higher-quality margin profile driven by sharper execution. Our focus now is simple: compound free cash flow, keep returns above the cost of capital through cycles, and invest with discipline in the categories and customer cohorts that matter."

The management emphasized their commitment to maintaining transparency and invited stakeholders for factory visits to witness the operational transformation firsthand.

Outlook and Growth Strategy

Varvee Global is positioned to capitalize on India's growing textile market while simultaneously building capabilities in adjacent sectors. The company's unique combination of debt-free operations, operational expertise, and strategic vision provides a strong foundation for sustainable growth across multiple business verticals in the coming years.