The Indian Texpreneurs’ Federation (ITF) conducted a survey to understand the growth aspirations of TN textile and apparel sector in line with the positive trend prevailing in export markets in the post-Covid global business environment. 257 members companies with combined yearly sales turnover of Rs 36,000 crore participated in the survey. The members are from across the value chain – spinning, semi-integrated, integrated, weaving, processing, garmenting and home textiles.
1. Time duration to double the current turnover
30% of the entrepreneurs have mentioned that, they are confident of doubling their current sales in three years’ time with a 25% CAGR. Eighteen percent of the entrepreneurs mentioned that they will double their current sales in four years with a 20% CAGR. And 36% of the entrepreneurs expect to double yarn sales in five years’ time with 15% CAGR.
In total, 76% of the surveyed firms said they will be able to double business over the next 3-5 years, with new capex cycle.
“Within the sub segments of textile manufacturing, home textiles, weaving and apparel segments are showing better momentum in terms of growth. This trend will help TN textile sector to further strengthen the value-added product manufacturing,” revealed Prabhu Dhamodharan, Convenor, ITF.
2. Interest of second and younger generations in the textile business
58% of the entrepreneurs said that the next generation is keen to take forward the textile business. “This is again a positive sign. Associations like ITF need to create new platforms to bring new trends and dynamism with a collaborative approach to match the aspirations and thoughts of the younger generation to motivate the less interested factions also towards new business opportunities,” said Dhamodharan.
3. Exploring IPOs
Around 40 companies, or around 16% of the companies mentioned about their keen interest to explore the IPO option to list their shares in Indian equity markets. Indian equity markets’ market capitalisation has crossed Rs 240 lakh crore. At the same time, combined market cap of listed companies from Indian textile and apparel sector is only Rs 2.2 lakh crore. Indian capital markets are growing at a rapid pace and the textile sector is also getting lot of interest and attention from investors with valuations rallying upwards.
“By realising these facts, the companies in TN textile sector are keen now to explore opportunity, which is a welcome trend. We from ITF are also forming a committee of experts to guide & handhold these companies to step into equity markets,” he said.
China plus One opportunity in export markets for Indian players, structural reforms from Union government, renewed and new thrust from TN government to support manufacturing sector, funding availability with lower Interest rates, new attention from international buyers towards TN textile eco-system due to its inherent strengths are the major reasons for such growth aspirations. “Team ITF will guide the interested companies in making value-added products, create various platforms to enable NextGen to engage, guide companies to step into equity markets in a structural way,” promises Dhamodharan.