GHCL Limited, India’s leading chemical and textile company signed a Memorandum of Understanding with the Government of Tamil Nadu for investing Rs 500 crores in the state. The MoU was signed by M. Sivabalasubramanian, CEO (Yarn Division) GHCL and Pooja Kulkarni IAS, MD & CEO, Guidance, Industries Department, Government of Tamil Nadu in the presence of M. K. Stalin, Chief Minister of Tamil Nadu during the Investment Conclave held on November 23 at Coimbatore.
As per the MoU, GHCL will set up 40,000 ring spindles in Manaparai, Tiruchirappalli district to produce synthetic and synthetic blended yarn to cater to knitting and weaving segments. It will also install another 40,000 ring spindles with 24 knitting machines in Paravai, Madurai district to produce 100% cotton yarn and knitted fabrics. The company also plans to develop an EHT (extra high tension) power transmission facility in Manaparai location to ensure uninterrupted power supply.
In order to fulfill its commitment towards sustainable business practices and reduce its carbon footprint, GHCL Ltd has proposed to set up a 20 MW solar power park near Musiri, Tiruchirappalli district. At the moment 52% of the energy requirements of GHCL’s yarn business is fulfilled from renewable resources. Once the project is completed, almost 70% of GHCL’s energy requirement for the spinning business will be from renewables.
Commenting on the occasion, R S Jalan, Managing Director, GHCL Ltd. said, “We are humbled and proud to be a part of Tamil Nadu’s growth story which is befitting our long term association with the state. This MoU will help us to create value for the community and is in accordance with our strategic growth plans and sustainability targets. Going forward, we will further enhance our energy portfolio to fulfil almost 90% of our energy requirements from renewable sources.”
India Ratings and Research (Ind-Ra) has upgraded GHCL Limited’s Long-Term Issuer Rating to ‘IND AA-’ from ‘IND A+’. The Outlook is Stable. Further, Ind Ra has also affirmed ‘IND A1+’ to GHCL Limited for issuance of Commercial Paper (CP) of Rs 100 crore, which shall be carved out of existing working capital facilities. As per rationale report, the CP proceeds will be used for fulfilling working capital requirements/refinancing of debt/bridge finance/capital expenditure. Ind-Ra has continued to take a consolidated view of GHCL and its wholly-owned subsidiaries – Grace Home Fashion LLC and Dan River Properties LLC, owing to the strong operating and strategic linkages among the entities.
The upgrade reflects GHCL’s continued healthy business profile, reflected in its leading market position in domestic soda ash industry, its competitive cost structure, resilient margin profile and healthy credit metrics, which are likely to be sustained over the medium term. The ratings factor in the proposed demerger of the textile segment, which is likely to result in a more stable earnings profile.