RSWM raises garment project cost to Rs 208.26 crore, adds knitwear

RSWM Limited (RSWM) on November 2, 2026 raised the planned cost of its denim-and-knit garment project to about Rs 208.26 crore from about Rs 186.30 crore, adding a knit-garment facility in the first phase. The board said the change is intended to achieve economies of scale and proposed up to Rs 46.24 crore of further subsidiary investment.

Why did RSWM raise the garment project cost?

RSWM raised the project cost because it added a knit-garment facility to the first phase of the denim-garment venture announced on August 5, 2026. The board approved the revised outlay of about Rs 208.26 crore on November 2, 2026, saying the combined denim and knit-garment plan is intended to achieve economies of scale.

The revision adds about Rs 21.96 crore to the previously announced cost of about Rs 186.30 crore. RSWM did not disclose the project’s capacity, location, commissioning date, product volumes, sales projections, profitability target or funding mix in the November 2 announcement.

The project vehicle’s stated industry is denim and knit garmenting, according to the Regulation 30 disclosure. Management’s stated rationale is scale economies; the filing does not provide a target for revenue, margins, exports, capacity utilisation or return on the Rs 208.26 crore outlay.

How will RSWM maintain its holding in the garment venture?

RSWM plans to invest up to Rs 46.24 crore, in one or more tranches, in LNJ NDS9 Global Private Limited through cash consideration. The proposed investment is intended to maintain the 74:26 ownership ratio specified in the joint-venture agreement, with RSWM retaining a 74% stake.

LNJ NDS9 Global Private Limited was incorporated on August 20, 2026 and became an RSWM subsidiary on that date. The company indicated that the proposed acquisition would be completed within 12 months and said no government or regulatory approval was required for the acquisition.

The disclosure classifies the transaction as a related-party transaction because LNJ NDS9 is an RSWM subsidiary, while stating it would be conducted on an arm’s-length basis. It also states that no promoter, promoter group or group company has an interest in the acquisition of the equity stake.

LNJ NDS9 had authorised share capital of Rs 1 crore and paid-up share capital of Rs 1 crore. It reported nil turnover in financial year 2025-26, while the disclosure also records nil turnover for financial years 2024-25 and 2023-24; RSWM did not disclose a valuation, a per-share purchase price, debt funding or the joint-venture partner’s planned contribution.

What do RSWM’s latest balance-sheet and cash-flow figures show?

RSWM reported consolidated total assets of Rs 4,029.90 crore as of September 30, 2026, compared with Rs 3,617.22 crore on March 31, 2026. Consolidated capital work in progress increased to Rs 105.88 crore from Rs 68.04 crore, while consolidated long-term borrowings rose to Rs 726.05 crore from Rs 648.95 crore.

At the standalone level, cash and cash equivalents stood at Rs 6.68 crore on September 30, 2026, compared with Rs 3.77 crore on March 31, 2026. Standalone current borrowings were Rs 1,018.11 crore at September 30, compared with Rs 1,008.49 crore at March 31; these reported figures do not identify funding for the Rs 208.26 crore project.

For the half year ended September 30, 2026, RSWM reported consolidated cash used in investing activities of Rs 232.08 crore, compared with Rs 37.67 crore in the corresponding period a year earlier. Acquisition of property, plant and equipment, intangible assets and capital advances was Rs 251.85 crore, against Rs 44.87 crore in the half year ended September 30, 2025.

How did RSWM’s core segments perform before the expansion?

RSWM’s standalone revenue from operations rose to Rs 1,322.29 crore in the quarter ended September 30, 2026 from Rs 1,149.95 crore in the corresponding quarter of 2025. For the half year ended September 30, 2026, standalone revenue from operations increased to Rs 2,483.53 crore from Rs 2,319.14 crore a year earlier.

The yarn segment reported revenue of Rs 1,147.39 crore in the September 2026 quarter, up from Rs 984.38 crore a year earlier. Fabric revenue rose to Rs 307.83 crore from Rs 258.80 crore, while the segment disclosure showed no garment revenue for the quarter.

Standalone profit after tax was Rs 24.53 crore in the September 2026 quarter, compared with Rs 7.43 crore in the September 2025 quarter. The quarter included an Rs 11.50 crore exceptional provision related to the electricity-duty matter before the Supreme Court, where RSWM had deposited Rs 7.42 crore under protest after the balance-sheet date.

Other comprehensive income for the half year included an unrealised gain of Rs 176.72 crore on fair valuation of equity investments, excluding deferred tax. This included an unrealised gain of Rs 180.78 crore from shares received under a scheme effective September 1, 2026, and was separate from operating performance or the garment project.

What other decisions accompanied the project revision?

RSWM’s nomination and remuneration committee approved 9.70 lakh employee stock options on November 2, 2026 at an exercise price of Rs 146 per option. Each option is convertible into one fully paid-up equity share with a face value of Rs 10 under the RSWM Limited Employees Stock Option Plan 2026.

The options can vest over one to four years from their grant date, except in specified cases of death or permanent incapacity. Exercise may take place for up to four years from each vesting date, and the disclosure says there is no lock-in on shares issued through option exercise.

The option grant followed board approval of the plan on May 6, 2026, shareholder approval on August 26, 2026, and in-principle approvals from BSE and the National Stock Exchange of India in October 2026. This equity-linked employee plan is separate from the cash investment of up to Rs 46.24 crore proposed for LNJ NDS9.

Conclusion

RSWM has expanded the originally announced denim-garment venture to include knit garments from the first phase, increasing the disclosed project cost by about Rs 21.96 crore to Rs 208.26 crore. The company proposes to invest up to Rs 46.24 crore in cash in LNJ NDS9 to preserve its 74% ownership, while the subsidiary remains newly incorporated and reported nil turnover for financial year 2025-26.

The next stated milestone is completion of the proposed LNJ NDS9 investment within 12 months. Investors will also need to watch for future disclosures on capacity, commissioning, financing, the joint-venture partner’s contribution and the first reported revenue from the garment segment, none of which were provided on November 2, 2026.