Kitex chief’s tirade against Kerala govt makes him richer by ₹222 crore

Kitex Group’s total value went up by Rs 408 crore to reach Rs 1,121.52 crore even though its net profit has been falling consistently

Kitex Group Chairman Sabu Jacob (center).

Kitex Group Chairman Sabu Jacob’s decision to invest outside Kerala has augured well for the company with the Kochi-based garment maker’s stock prices going up by 44% since Friday (July 9) – the day Jacob declared he will invest Rs 1,000 crore in Telangana state.

Sabu Jacob has a 55% stake in the BSE-listed company thus he has become richer by Rs 222 crore in just a week. Ever since the verbal duel started between Jacob and the Kerala government in the last week of June, Kitex Group’s stock price has gone up from Rs 108.9 per share to Rs 168.65 — a phenomenal rise of 55%.

Also read: Kitex chairman at it again, calls Kerala Industries dept a ‘frog in the well’

On July 9, Jacob left Kochi with a five-member team on board a Telangana private jet. While taking off, Jacob said he is leaving Kerala with a “heavy heart” and that he was being “kicked out” by the (Kerala) government. Earlier, Jacob withdrew Rs 3,500 crore project in Kochi on June 30, alleging witch-hunt by Kerala government agencies.

Kitex’s share prices jumped 20% on July 9, the day he declared investment plans for Telangana, and another 20% on July 12, when Jacob asserted that he won’t invest in Kerala again.

Jacob has said that he will explore investment options in Andhra Pradesh, Tamil Nadu and Karnataka.

The New Indian Express reported that Kitex’s total value has reached Rs 1,121.52 crore, a rise of Rs 408 crore from last Tuesday. The growth in stock price is surprising because Kitex’s net profit has been falling consistently. For the fourth quarter (Q4) that ended in March 2021, the company’s after-tax profit dropped from Rs 17.62 crore to Rs 8.27 crore, a fall of over 50%. Besides, the world’s third largest kids garment maker has reported a 23% fall in total sales in Q4 ending March 2021.