GHCL Ltd. said its board approved the proposal to hive off its textiles business.

The chemical maker’s inorganic chemicals and textiles businesses will be separately listed companies, after the National Company Law Tribunal approves the scheme of arrangement, according to an exchange filing.

Each shareholder of the current company will receive equal shares in both the companies, indicating a mirror shareholding structure, it said.

The demerged textile business will be listed on the exchanges at a later stage with its currently-listed business being the chemicals, the filing said. The textile business will cease to be the company’s subsidiary after the restructuring, it said.

Textiles constitute 35.5 percent to the chemical maker’s total revenue, as per its FY19 earnings. It consists of manufacture and sale of textiles including, but not limited to, yarn manufacturing along with weaving, processing, cutting and sewing of home textiles products.

Businesses have evolved within the company and are presently at different stages of maturity with differing risk and return profiles and capital and operational requirements, it said.

The company said the restructuring will maximise value for all stakeholders, leading to a better focus on the demerged business. RS Jalan, managing director of the chemical maker, had earlier told BloombergQuint told BloombergQuint that the spinning industry was affected due to global and domestic factors.

Shares of GHCL have corrected 47 percent year-to-date. Currently, three analysts are covering the stock with targets substantially higher than the current price.

Source: Bloomberg Quint