Blackstone ups stake in Gokaldas to 68 percent
Bangalore: Private equity (PE) player Blackstone is upping its stake in India's apparel exporting firm Gokaldas Exports (GEL). A filing made by GEL to the exchanges says that Blackstone could acquire 6.113 million shares tendered by GEL's shareholders during the open offer, thus taking its share in GEL to 67.88 percent. The open offer was for 6.875 million shares (or an additional 20 percent) at a price of Rs 275 per share. The open offer began when the promoters of GEL, the Hinduja family, sold a majority 50.1 percent stake in the company to Blackstone in August 2007. Although the equity changed hands, the Hinduja family continues to have operational charge. "The tailspin the market went through in January may have bolstered the investor response to the open offer. Additionally, there has been some investor apathy to export-focused sectors like apparel and IT in the light of the rupee appreciation against the dollar," said a fund manager. The sale to Blackstone is perceived as a trend setting deal in the apparel industry with some other smaller deals following. Bombay Rayon acquired Leela Scottish Lace and many more apparel exporters evinced interest in a sell-out if the 'price is right'. A rising rupee had pegged GEL's net profit margin at 6.12 percent in the third quarter (Q3) ended December 31, 2007. It was 6.98 percent in the comparable quarter of FY07. The operating margins showed improvement at 12.76 percent against 11.84 percent during this period. The company also said in a statement that Akhil Gupta, chairman and managing director of Blackstone India, and Richard Saldanha, executive director of Blackstone India, have been appointed additional directors of Gokaldas Exports. Madanlal J Hinduja has resigned as managing director.