Why did shares of Mukesh Ambani's Reliance-owned Alok Industries zoom 15%? Key reasons explained

Textile stocks in focus: While the Indian stock market continued to trade in a narrow range on Tuesday, July 8, amid uncertainty over the India–US trade deal and the resurfacing of global trade tensions, textile stocks managed to attract attention, with most of them trading higher.

Alok Industries, one of the leading textile manufacturers, saw its share price soar 15.30% to hit a 7-month high of ₹23.20, as optimism around the sector improved on expectations that the latest tariffs on Bangladesh could create opportunities for India to expand its textile exports to Western countries.

On Monday, Trump released the first in a series of tariff warning letters, just two days before agreements are due on countries facing his April 2 so-called reciprocal levies. The new rates include 25% duties on goods from Japan, South Korea, and Malaysia; 32% on Indonesia; 35% on Bangladesh; 36% on Thailand and Cambodia; and 40% on Laos and Myanmar.

While the newly announced 35% tariffs on Bangladesh are slightly lower than the earlier proposed 36%, they are still significant enough to impact Bangladesh’s textile exports, given that its economy heavily relies on textile manufacturing.

Experts suggest that fresh tariffs on the neighboring country may influence American buyers to turn to India, which is currently well-positioned from domestic policy tailwinds.

Although the trade agreement between India and the US has faced repeated delays, recent media reports suggest that a final pact could be announced soon. Expectations are that the textile sector could be among the key beneficiaries of this potential agreement.

Earlier, in May, India and the United Kingdom signed a landmark Free Trade Agreement (FTA), which aims to increase bilateral trade by £25.5 billion ($34 billion) by 2040 through liberal market access and eased trade restrictions, with the textile sector seeing benefits from this pact.

India is ranked among the top textile-exporting countries globally, with a share of approximately 4% of global textiles and apparel exports. The major export destinations for India in this segment are the United States (US), the European Union (EU), and the United Kingdom (UK), accounting for around 53% of total textile and apparel exports in FY 2023–24.

The Indian government has been increasing its focus on the textile sector, offering incentives and reforms to strengthen domestic manufacturing. In the Union Budget 2025–2026, the Indian government announced a five-year mission aimed at enhancing the productivity and sustainability of cotton farming.

Established in 1986, Alok Industries is an integrated textile manufacturer headquartered in Mumbai. It has a strong presence in both the cotton and polyester segments. In the cotton segment, the company is integrated from spinning to weaving, processing, finished fabrics, bedsheets, towels, and garments.

In 2020, Reliance Industries, jointly with JM Financial Asset Reconstruction, successfully acquired Alok Industries through the insolvency and bankruptcy law auction conducted by lenders seeking to recover unpaid loans. RIL held 40% of the company at the end of March quarter, while JM Financial ARC held a 34.99% stake in the company.

Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of Mint. We advise investors to check with certified experts before taking any investment decisions.

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