Gokak Textiles Limited has announced the permanent closure and proposed sale of its knitwear unit/factory located in Belagavi, Karnataka. This decision follows a decline in the knitwear business’s performance over past years. The Board of Directors approved the closure and subsequent sale, with an agreement for the sale of land, building, and machinery already in place. The closure is subject to regulatory approvals, and the sale is expected to be completed by October 2026.
Strategic Business Decision: Knitwear Unit Closure
Gokak Textiles Limited’s Board of Directors has officially approved the permanent closure and subsequent sale or disposal of its knitwear unit/factory. The facility is situated on Bagalkot Road, Village Marihal, District Belagavi, Karnataka. This significant strategic decision was made at the Board meeting held on August 11, 2026, and is subject to obtaining necessary statutory and regulatory approvals.
Rationale Behind the Closure
The decision stems from the overall decline in the performance of the knitwear business over the past several years. The knitwear unit, established in 1995, operated on freehold land spanning 15.65 acres. While initially focused on the export market, its sales diversified over time. Key factors contributing to the closure include structural cost disadvantages, operational unviability, adverse textile industry conditions, machinery obsolescence, industrial relations issues, and environmental/regulatory restrictions. Specialized garmenting machinery was shifted to the Mills Division in 2015-16, leaving only cutting and stitching facilities at the Marihal unit.
Sale of Assets and Agreement Details
An agreement for the sale of the land, building, and machinery of the Knitwear Unit was previously executed in September 2025 with M/s V. G. Parekh & Co., Vijayapura, Karnataka. The sale is on an ‘as is, where is’ basis. The expected date for the completion of the sale/disposal is October 2026, with a consideration agreed at Rs. 19.50 Crores. The net worth contributed by the knitwear business unit as at March 31, 2026, was negative Rs. (4,192.55) lakhs, representing 21.58% of the Company’s negative net worth of Rs. (19,423.50) lakhs. The turnover of the knitwear business for FY 2025-2026 was Rs. 422.73 lakhs, accounting for 9.76% of the Company’s total revenue.
Future Compliance
The company has confirmed that it will comply with the requirements of regulation 37A of the LODR Regulations before selling the unit.
Source: BSE
