In the last decade, only a few entrepreneurs in Western Tamil Nadu's textile industry viz KRP Mill, Ambika Cotton and Loyal Textile Mills took to Dalal Street and fared well after their IPO and sustained interest among investors over the decade got going.
A strong domestic demand and a gradual increase in exposure as to how the capital markets work appear to have pushed new entrepreneurs towards the markets now.
Western Tamil Nadu's textile belt entrepreneurs, who had till now banked on debt to run their privately held businesses, are opening up to the idea of taking their companies public thus changing the mindset of the state's oldest business clusters.
The process was aided by two awareness sessions by NSE for its ‘Emerge Platform’. One such meet held four months ago had Chitra Ramkrishna, MD of NSE deliver a talk to Tirupur's entrepreneurs on why they should end their IPO drought.
Integrated firms manufacturing goods across the supply chain from yarn to finished apparel numbering close to at least 80 work out of Coimbatore, Tirupur and Erode boast fairly high levels of operating margins, international clientele like Walmart and Macy's and strong business continuity typical of family-run businesses. But, till now, they have held back their exposure to capital markets.
Tirupur based garment maker specializing in knitted apparel that began nearly with 40 workers and 24 sewing machines two decades ago, now runs 3,600 sewing units, rolls out 40,000 pieces a day to Indian retailers and the ones in West and Australia.
It is said that lack of exposure restricted the way they structured their companies-it was either proprietary or the Limited Liability Partnership. Some extended it to Private Ltd companies.
But now, globalization has opened up new horizons to the avenue of tapping public money. Secondly, in a competitive, volumes-driven business environment, a company needs to have a strong fund flow.