Kochi: The shares of Kitex Garments soared 10 per cent at the bourses (NSE) to hit an intra-day high of Rs 164.10 on Thursday after the Telangana government approved its expansion plan there.
The stock closed at Rs 164.10 on Thursday.
The stock had ended at Rs 149.20 on Wednesday (Sept 1), down 34 per cent from its 52-week high of Rs 224.45 touched on July 13, 2021.
The world's second-largest producer of children's apparel, Kitex Garments, aims to set up a Rs 1,000 crore textile manufacturing unit at the Kakatiya Mega Textile Park in Warangal.
Alleging that he was "kicked out" of Kerala, Kitex Group Chairman and Managing Director Sabu M Jacob announced the decision in July after a series of meetings with Telangana Industry Minister KT Rama Rao and other senior officials.
The decision had come shortly after Jacob announced backing off from his group's Rs 3,500 crore investment project in Kerala citing harassment by state government officials.
The industrialist had alleged that various units of Kitex were raided 10 times by officials from various departments in June.
He had said that officials comprising 40-50 in numbers, entered the factory units, carried out searches, prevented workers, including women employees, from doing their job, grilled them and harassed them.
Jacob also labelled Kerala as a non-business friendly state.
Kitex Garments also cited ease of doing business, utilisation of better logistics and infrastructural facilities, incentive and subsidy schemes from the Telangana government, proximity to raw material sources and reduced cost of labour as some of the reasons behind its investment plan in Telangana.
"The State of Telangana ranks among highest in ease of doing business and is an ideal destination for apparel manufacturing as it is the third-largest producer of cotton in India," Kitex Garments said in its statement.
"It has sufficient infrastructure facilities, investor-friendly state policy, thereby very conducive for industrial growth. With liberal government policy, availability of raw materials and various incentives offered by the state, the Company expects to reduce its operating cost, shorten the payback period and drive profits. The Company also expects to fast track its investment with active state government support," the statement further read.
Kitex's Telangana project is likely to create 4,000 jobs. The 54-year-old company also aims to expand to other states.
The group's exit had embarrassed the Kerala government. However, Kerala industries minister P Rajeev rejected Kitex's charges as baseless.
Kitex is one of the largest private-sector employers in Kerala. It also runs a non-profit, political organisation called Twenty20.
