Buoyed by the recent signing of free trade agreements (FTAs) and by growing unrest in competitor Bangladesh, domestic textile companies are rushing to the stock exchanges to raise capital for expansion, capacity enhancement, and modernisation.
At least five textile companies have filed papers with the market regulator, the Securities Exchange Board of India (SEBI), to raise over ₹500 crore through initial public offerings (IPOs). Of these, three companies will tap the main bourse, while two will list on the SME platform.
Among the companies that will be tapping the main bourse are Alpine Texworld, Astha Spintex and TC Terry Text, while Shreedhar Spinners and Shree Ram Twistex will list on the SME platform.
Most state governments are offering textile companies special incentives to set up solar projects and capital subsidies to boost employment and industry growth.
Export expansion
The government has set a target to scale the textile market to $350 billion in FY30 from $194 billion in FY26, implying a CAGR of 13 per cent. This growth is expected to be driven by strong export expansion (22 per cent CAGR) and steady domestic demand (10 per cent).
Soham Samanta, Research Analyst, Motilal Oswal Research, said, “India faced additional US tariffs as high as 50 per cent in mid-2025, but these were subsequently reduced to 10 per cent until the end of July. Meanwhile, Bangladesh and Indonesia secured trade arrangements with tariffs of 19 per cent tariffs each, and Vietnam faces 20 per cent. This convergence has placed India on a broadly level playing field with its key competitors in the US market.”
He added that with India accounting for only 4-5 per cent of global apparel trade, significant opportunities remain to gain market share as global brands diversify sourcing beyond China.
Looking ahead, he expects growth to recover, supported by upcoming FTAs with the UK and EU, favourable tariff realignments and improving incentives such as RoSCTL (Rebate of State and Central Taxes and Levies).
Persistent pressure
Ratiraj Tibrewal, CEO at Choice Capital, said, for nearly half a decade, India’s textile industry operated under persistent pressure —not due to poor management, but because of a structural disadvantage it could not overcome on its own. While Bangladesh and Vietnam secured preferential market access through trade agreements, India continued to face duties of 9-12 per cent in the EU and the UK, consistently pricing its exporters out despite being competitive on quality. With no credible growth narrative to support valuations, the IPO market held little appeal for both promoters and investors.
However, this has now changed with the recent wave of proposed trade agreements with the UK, EU and the US, which have given the sector what it lacked — a credible forward revenue visibility. Textile stocks witnessed strong momentum on the day the UK FTA implementation date was confirmed, and buyers have already begun conducting factory audits in anticipation of shifting orders.
Capacity expansion
“With India’s IPO market at a historic high, promoters — particularly those backed by private equity funds seeking long-awaited exits — recognise that going public now is the most logical route to fund the capacity expansion required to meet the expected surge in demand,” he said.
Arun Kejriwal, an independent analyst, said, “Textile companies, particularly those based in Gujarat, have benefited from the incentives such as support for solar projects and tax benefits on capital investments.’
He added that the social unrest and economic slowdown in Bangladesh have created new opportunities for Indian textile companies to expand their presence in global markets and strengthen their position in the global supply chain.
The rising cost of manufacturing and export restraints in China have further benefited Indian exporters, who are increasingly becoming more organised and professional as they prepare to list on the stock exchange.