The Board of Directors of Lux Industries Limited have approved the聽scheme of merger聽of its group entities J. M. Hosiery & Co. Limited and Ebell Fashions Private Limited with Lux Industries Limited.
Lux Industries Limited (Lux),聽incorporated in 1995 is one of the largest players in the hosiery business in India. Products include Men鈥檚, Women鈥檚 & Kids Innerwear Starling Marte World Baseball Classic Jersey , Winterwear, Socks & Slacks for Women in varied colours and designs. LUX has a presence across the globe with exports to 47 countries.
J.M Hosiery & Co. Limited (JM)聽is engaged in the business of manufacturing, marketing Nelson Cruz World Baseball Classic Jersey , selling and distribution of knitted apparel including hosiery. The Manufacturing unit of the company is in Tiruppur in the state of Tamil Nadu.
Ebell Fashions Private Limited (Ebell)聽is engaged in the business of manufacturing, marketing, selling and distribution of knitted apparel for women鈥檚. The Manufacturing unit of the company is in Dankuni Jose Bautista World Baseball Classic Jersey , Kolkata.
Transaction
The prime rationale behind the merger could bring the growing brands under the listed entity. JM operates into premium segment under the brand 鈥淕en X鈥?and Ebell is into rapidly growing women knitted apparels. In future, this merger can pave the way for Lux to have premium products in all segments in its product portfolio. The appointment date for the transaction is 1st聽April 2018.
Shareholding Pattern of Lux Industries
JM & Ebell belongs to the promoter group and the entire share capital of both are held by promoters except for the 1.32% of JM is held by Lux.
Post-transaction, Promoters stake in the company will be increased beyond the maximum limit.聽 In near future Jonathan Villar World Baseball Classic Jersey , promoters will have to bring their holding in the company to ~75% in compliance with SEBI listing norms.
Swap Ratio For every 100 equity shares held in JM will be entitled to receive 29 equity shares of Lux. For every 100 equity shares held in Ebell will be entitled to receive 1142 equity shares of Lux. Financials
Particulars LUX 2018 2017 Revenue 1137 971 EBIT % 13.1% 11.7% PAT % 7.0% 6.5% CFO -2.32 20.52 Total Debt 321 240 Networth 320 241 Capital Employed 641 481 RoCE 23.2% 23.7% Working Capital % Sales 44.0% 39.9%
Table 2: FY 17 & FY 18 Financials of Subsidiaries
Particulars JM聽 Ebell 2018 2017 2018 2017 Revenue 292 251.0 198.1 164.8 EBIT % – 6.0% – 16.2% PAT % 5.5% 3.5% 10.6% 10.0% CFO – 9.4 – 4.8 Total Debt 111 102 15 18 Networth 91.49 75.0 52.0 30.7 Capital Employed 202.5 176.77 67.0 48.4 RoCE NA 8.5% NA 55.1% Working Capital % Sales 0.0% 59.9% 0.0% 23.1%
Table 3: Lux Industries related party transaction in FY 17 (All Figs in INR Crores)
Particulars Lux JM Sale of Goods 7.89 Purchases 20.72 Ebell Sale of Goods 1.05 Purchases 6.52 Others 3.85
The group companies are continuously engaged in various transactions with each other. The scheme will help in reduction in various regulatory compliances related to transactions with related parties in future.
Assigned valuation
Table 4: Valuation of All Companies
Particular Amount in crore Value聽assigned to JM 406 Value聽assigned to Ebell 510 Value聽assigned to Lux 4,492 No. of equity share (Pre) 2,52 Carlos Santana World Baseball Classic Jersey ,53,000 No. of equity shares (Post) 3,00 Jose Reyes World Baseball Classic Jersey ,71,682 Dilution 19% Increase in Revenue 43.10% Increase in EBIT 38.26% Valuation Multiple鈥檚 Particular Lux JM Ebell Revenue 4.0 1.4 2.6 PAT 56.2 25.4 30.8 Conclusion
The proposed聽merger聽is a step towards increasing the product portfolio of the listed umbrella company. The merged entity will definitely聽optimise聽distribution and marketing cost. In the process, the company will reap befits of cost optimisation for raw materials with better terms in pricing and credit terms. The scheme will pave the way for Lux to add聽premium聽product in its basket and will simultaneously achieve聽a better聽corporate governance for the company. All the above Jean Segura World Baseball Classic Jersey , it will hopefully聽unable聽the company to attract smart and long-term capital. Gurgaon has no doubt become the new IT hub of Delhi NCR surpassing its close competitor Noida. The best MNC鈥檚 now have their offices in Gurgaon. The latest addition to the Gurgaon鈥檚 corporate facilities is the Cyber City. The Cyber City has the best of IT offices and corporate spaces. Let鈥檚 have a look why it is also the best when it comes to holding a business conference.
1. Proximity to major business offices: The Cyber City is located near to most of the business offices in Gurgaon and thus is quite famous for hosting their business conferences. Some of the MNC鈥檚 are even located inside the Cyber City and thus it is the best choice for them.
2. Connectivity from all major cities: The Cyber City is located in close proximity to airport and railway station. Also, it is connected to a 16 lane expressway which connects it to other parts of Delhi NCR.
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