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Bengal Tea to close spindles setup from its Ahmedabad textile division

The company on Wednesday informed BSE in a filing that the Company held a board meeting on April 26, 2017, and took a decision regarding closure of 9600 spindles, along with back process; and winding in spinning section of the textile division of the Company located at Asarwa Mills, Ahmedabad, with effect from May 1, 2017.
The decision was taken on the background of negative contribution of the mentioned machinery from the textile division, and due to competition from new spindles set up under the Gujarat Textile Policy, 2012, as their cost of production is substantially lower due to various subsidies enjoyed by them, mentioned the BSE filing.
The said step would cost the company a fall in revenue by Rs 30 crore on an annual basis. Also, 74 workers would be retrenched by the company from the same textile division.
The BSE filing further stated that the proceeds from the sale of the machinery would be utilised for payment of retrenchment compensation to workers, and balance for augmentation of working capital of the textile division of the company.
The stock of Bengal Tea & Fabrics, a diversified company in tea and textile manufacturing, dipped by 0.28% to Rs 53.50 on BSE at 12:40 PM IST.
Meanwhile, the BSE Sensex was trading up 0.54% at 30104; whereas, the NSE Nifty was up 0.47% at 9350 levels.
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Bengal Tea & Fabrics Ltd is currently trading at Rs 53.95, up by Rs 0.3 or 0.56% from its previous closing of Rs 53.65 on the BSE.
The scrip opened at Rs 55.5 and has touched a high and low of Rs 56 and Rs 53.2 respectively. So far 1601(NSE+BSE) shares were traded on the counter. The current market cap of the company is Rs 48.32 crore.
The BSE group ‘XD’ stock of face value Rs 10 has touched a 52 week high of Rs 63.5 on 07-Jul-2016 and a 52 week low of Rs 40.6 on 01-Jun-2016. Last one week high and low of the scrip stood at Rs 56 and Rs 51.8 respectively.
The promoters holding in the company stood at 73.38 % while Institutions and Non-Institutions held 0.6 % and 26.02 % respectively.
The stock is currently trading above its 200 DMA.