Garment Division at Marihal closed from 06.10.2026; closure permission deemed granted

Garment Division (Knitwear Unit), Marihal, Belagavi stands closed from 06.10.2026.

Tue 6 Oct 2026

Closure Effective Date

06.10.2026

Agreed Sale Consideration

Rs. 19.50 Crores

Net Worth of Unit (31 March 2026)

negative Rs. (4,192.55) lakhs

Closure of the Garment Division

The company has notified that its Garment Division (Knitwear Unit) at Marihal Village, Belagavi shall stand closed with effect from 06.10.2026. This follows its earlier intimation dated August 11, 2026 on the closure and proposed sale of the unit.

How the closure took effect

• The management shared an application dated 06.07.2026 under Section 25-O of the Industrial Disputes Act, 1947, read with Section 80 of the Industrial Relations Code, 2020, seeking permission from the State Government for closure of the unit with effect from 06.10.2026, i.e. after completion of 90 days from the date of application.
• A copy of the application was served on the concerned union/workmen, and the State Government received the application on the same date.
• The designated authority was to conduct a hearing and decide within 60 days of receipt. The management received a notice from the Additional Labour Commissioner (ADLC), Bengaluru, attended a meeting on 05.08.2026 and received a letter from the ADLC dated 06.08.2026.
• No order granting or refusing permission was received from the Government of Karnataka, Labour Department, within the statutory 60-day period. Under Section 25-O(3) read with Section 80(3), the permission for closure is deemed to have been granted on expiry of that period.

What the closure involves

• The Garment Division stands closed from 06.10.2026 and, as a consequence, the services of all the workers stand terminated.
• The management states that full and final settlement of all dues, including closure compensation, shall be made in accordance with applicable labour laws and statutory requirements.
• Following the closure, the land, building, plant and machinery of the division will be sold/disposed off after all necessary regulatory and statutory approvals are obtained.
• The unit sits on freehold land of 15.65 acres including utilities and was set up in 1995. Specialised garmenting machines had been shifted to the Mills Division at Gokak Falls, Karnataka in 2015-16, and the cutting and stitching facility has now also shifted there.

Numbers reported for the division

• For FY 2025-2026, turnover of the knitwear business/unit was Rs. 422.73 lakhs, i.e. 9.76% of the total revenue from operations for the year.
• As at 31 March 2026, net worth of the knitwear business/unit was negative Rs. (4,192.55) lakhs, contributing 21.58% to the company's net worth of negative Rs. (19,423.50) lakhs.
• A binding agreement for sale of the land, building and machinery of the unit was entered into on September 09, 2025, with consideration agreed at Rs. 19.50 Crores.
• The buyer, M/s V. G. Parekh & Co., is engaged in real estate development and leasing in Karnataka with its headquarters in Vijayapura, and does not belong to the promoter/promoter group/group companies.
• The transaction is stated not to fall within related party transactions, and the sale is outside a Scheme of Arrangement.

Reasons given for the closure

• Structural cost disadvantages and operational unviability
• Adverse textile industry conditions
• Machinery obsolescence and high maintenance costs
• Industrial relations issues
• Electricity and water supply issues
• Environmental and regulatory restrictions

How this may be read

The unit being closed is a loss-making one, with negative net worth, and its land, building and machinery are already tied to an agreed sale consideration. The closure formalities follow the timeline the company had indicated earlier, and the management has stated its commitment to settle worker dues as required by labour law. The scale of the unit's contribution to the company's revenue and net worth, and the agreed sale value, are the figures that show its financial weight.

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