Kitex Garments Surges After Telangana Government Approves Expansion Plan

Shares of the world's second largest producer of children's apparels, Kitex Garments, rose as much as 10 per cent to hit an intraday high of Rs 164.10 a day after the company informed exchanges that the government of Telangana approved its expansion plan. The company in July informed exchanges that it was invited by the Telangana Government for discussions on potential investment opportunities in the state.

Kitex Garments plans to invest Rs 1,000 crore in Telangana and expects its capacity to double in the next two years.

Kitex Garments cited ease of doing business, utilisation of better logistics and infrastructural facilities, incentive and subsidy schemes from the government, proximity to raw material sources and reduced cost of labour as some of the reasons behind its investment plan.

"The State of Telangana ranks among highest in ease of doing business and is an ideal destination for apparel manufacturing as it is the 3 largest producer of cotton in India, has sufficient infrastructure facilities, investor friendly state policy, thereby very conductive for industrial growth. With liberal government policy, availability of raw material and various incentives offered by the state, the company expects to reduce its operating cost, shorten payback period and drive profits. The Company also expects to fast track its investment with active state government support," Kitex Garments had said in a press release in July.

As of 11:58 am, Kitex Garments shares were locked in a 10 per cent upper circuit with pending buy orders for 1,14,704 shares on the BSE.