Fractal Industries plans a 98% Dubai trading subsidiary

Fractal Industries Limited plans to form 4P Global in Dubai as a 98%-owned subsidiary, with AED 100,000 share capital, for international trading and distribution of scrap, metal, plastic materials and textiles, including in India. Its board approved the proposal on November 6, 2026, subject to Meydan Free Zone approval.

What is Fractal Industries setting up in Dubai?

Fractal Industries is in the process of incorporating 4P Global, a proposed company in Dubai, after applying to the Meydan Free Zone. The November 6, 2026 board disclosure describes the entity as proposed rather than an operating acquisition, and reports turnover as not applicable. The proposed company is expected to have share capital of AED 100,000.

Fractal Industries has agreed to subscribe for shares in the entity for cash at AED 10 per share. Its planned holding is 98%, meaning the Dubai company would be a 98%-owned subsidiary rather than a wholly owned unit. The disclosure gives an indicative completion period of 60 days and identifies Meydan Free Zone approval as the required regulatory approval.

The entity’s stated activity is import, export and local trading of scrap and metal, alongside distribution worldwide including India. A separate description expands the proposed objects to scrap and metal waste, plastic materials and textile trading, with international distribution. The filing does not state expected revenue, customer contracts, trade volumes or the identity of the party holding the remaining 2% interest.

Why is the Dubai subsidiary a related-party transaction?

Fractal Industries says the proposed subscription is a related-party transaction because a relative of one of its promoters is a director of 4P Global. The November 6, 2026 announcement does not identify the promoter, the relative or the proposed director’s responsibilities beyond the directorship. It also does not state whether the arrangement is at arm’s length.

The planned 98% holding would make 4P Global a subsidiary, while the promoter-relative directorship creates the related-party classification disclosed in the filing. Fractal Industries describes the transaction as a cash subscription for shares, not a share swap or a purchase of an existing trading business. The disclosed terms give an AED 10-per-share price and AED 100,000 proposed share capital.

The structure differs from an acquisition of an established overseas target because 4P Global has no reported three-year turnover history, incorporation date or pre-existing country operations. Fractal Industries says formation is being started through Meydan Free Zone with the aim of international trading and distribution. The filing leaves the trading scale, working-capital requirement and commercial terms undisclosed.

How does 4P Global differ from Fractal Industries’ current business?

Fractal Industries’ disclosed existing business is designing, sourcing and manufacturing garments, plus providing end-to-end warehousing and supply-chain services to e-commerce platforms. The 4P Global proposal therefore adds trading in scrap and metal waste, plastic materials and textiles, rather than extending only the company’s stated garment design, sourcing and manufacturing operations.

The proposed subsidiary’s textile trading object has a link with Fractal Industries’ garment activities, but scrap, metal and plastic-material activities are separately listed in the disclosure. Fractal Industries has not quantified how much of 4P Global’s trading could involve textiles versus scrap, metal or plastics. It also has not provided a segment forecast or expected profit contribution.

Fractal Industries’ standalone balance sheet showed inventories of Rs 53.65 crore at September 30, 2026, compared with Rs 38.99 crore at March 31, 2026. Trade receivables rose to Rs 6.82 crore from Rs 6.18 crore, while cash and cash equivalents were Rs 15.04 crore compared with Rs 31.32 crore. These figures provide balance-sheet context but do not identify the funding source for the Dubai subscription.

What other decisions did Fractal Industries approve on November 6?

Fractal Industries’ board also approved a loan of up to Rs 2 crore to subsidiary Nested Brands Private Limited during financial year 2026-27, subject to the applicable provisions of the Companies Act, 2013, including Section 185. The announcement treats this loan approval separately from the proposed Dubai incorporation and does not say that any of the Rs 2 crore will finance 4P Global.

On the same date, the board approved standalone and consolidated unaudited financial results for the half year ended September 30, 2026, with statutory auditors issuing a limited review report. The standalone cash-flow statement reported profit before tax of Rs 8.62 crore for the half year, compared with Rs 8.30 crore for the half year ended September 30, 2025.

Operating cash flow moved to an outflow. Net cash used in operating activities was Rs 9.86 crore in the half year ended September 30, 2026, compared with net cash generated of Rs 3.08 crore in the corresponding 2025 half year. The statement recorded a Rs 14.66 crore increase in inventories during the 2026 half year, compared with a Rs 5.68 crore increase a year earlier, alongside a Rs 2.33 crore increase in short-term loans and advances.

Conclusion

The proposed 4P Global formation would give Fractal Industries a 98% interest in a Dubai vehicle intended to trade and distribute scrap, metal, plastic materials and textiles worldwide, including India. The plan moves into activities beyond the company’s disclosed garments, warehousing and e-commerce supply-chain services, and is classified as a related-party transaction because a promoter’s relative is a director of the proposed company.

The next disclosed milestones are Meydan Free Zone approval and the company’s indicative 60-day formation timetable. Fractal Industries has not disclosed the final incorporation date, the identity of the other shareholder, the funding arrangement, commercial trading plans or a forecast financial contribution from 4P Global.