“The company would like to inform you that a proposal submitted by Kitex Garments before the Government of Telangana towards expansion plan has been approved. The government order will be issued within a few days,” the company said in a BSE filing.
Following the development, shares of Kitex Garments surged 10 per cent, its daily circuit limit to Rs 164.10 on Thursday. BSE Sensex was trading at 57,455.50, 117.29 points or 0.2 per cent higher. The scrip settled at Rs 149.20 on Wednesday.
The company had proposed the intention of investment in Telangana after a rift with Kerala government. Kerala-based Kitex Garments has entered Telangana with an initial investment of Rs 1,000 crore.
Kitex, as part of the deal with Telangana government, would be setting up its factories at Kakatiya Mega Textile Park in Warangal district. The Telangana government had extended an invitation to the company for setting up an apparel unit in the state.
Shares of Kitex Garments have rallied over 50 per cent in the last one year. However, it has underperformed in the last one month, giving a negative return.
Sabu Jacob, chairman of Kitex Group, has reiterated that the company would not make any further investments in home-state Kerala. The labour department of Kerala govt has withdrawn show cause notices issued to the company on the minimum wage issue.
On June 30, Kitex, the world’s second largest manufacturer of kids apparel, had announced to withdraw Rs 3,500 crore investment from Kerala alleging an incessant witch hunt and harassment by state government officials.
