Gokak Textiles Approves Permanent Closure and ₹19.50 Crore Sale of Belagavi Knitwear Unit

Bengaluru-based Gokak Textiles Limited (BSE: 532957, Security ID: GOKAKTEX) announced that its Board of Directors, at its meeting held today, August 11, 2026, approved the permanent closure and subsequent sale of its Knitwear Unit located at Village Marihal, Bagalkot Road, Belagavi District, Karnataka.

The unit, established in 1995 across 15.65 acres of freehold land, is being sold on an "as is where is what is" basis to real estate development firm M/s V. G. Parekh & Co. for a total commercial consideration of ₹19.50 crore.

Background and Strategic Rationale

Initially established to cater exclusively to export markets, the Knitwear Unit's operational scope was gradually reduced over time. In FY 2015-16, specialized garmenting machinery-including fabric dyeing and knitting equipment-was relocated to the company's Mills Division at Gokak Falls, leaving only cutting and stitching operations at the Marihal site.

The decision to permanently close and dispose of the unit follows years of declining performance and escalating operational unviability driven by several factors:

Structural cost disadvantages and adverse textile market conditions

Machinery obsolescence and high ongoing maintenance costs

Industrial relations, electricity, and water supply issues

Environmental and regulatory constraints

Financial Overview of the Unit

Revenue Contribution: For FY 2025-26, the knitwear unit generated turnover of ₹422.73 lakh, contributing 9.76% to Gokak Textiles' total revenue from operations (down from ₹505.47 lakh or 5.17% in FY 2024-25).

Net Worth Impact: As of March 31, 2026, the net worth of the knitwear unit stood at negative ₹(4,192.55) lakh, accounting for 21.58% of the company's overall negative net worth of ₹(19,423.50) lakh.

Transaction Timeline and Regulatory Approvals

The company had previously signed the sale agreement with M/s V. G. Parekh & Co. in September 2025. Following procedural and administrative extensions, the transaction and unit closure are now expected to be fully completed by October 2026.

Shares of GOKAK TEXTILES LTD. was last trading in BSE at Rs. 59.50 as compared to the previous close of Rs. 59.50. The total number of shares traded during the day was 316 in over 6 trades.

The stock hit an intraday high of Rs. 59.50 and intraday low of 59.30. The net turnover during the day was Rs. 18799.00.

Source : Equity Bulls

Keywords

GOKAKTEXTILES INE642I01014 Closure Belagavi KnitwearUnit