Synopsis:-In a move that puts Arvind’s advanced materials arm on the global map, subsidiary Arvind Advanced Materials Limited (AAML) has acquired a 61 percent controlling stake in US-based needle-punch nonwoven manufacturer Dalco-GFT for an enterprise value of $136 million, with the deal structured as margin and EPS accretive from year one.
A leading textile conglomerate is making headlines after its advanced materials arm crossed borders for the first time, signing a deal to acquire a controlling stake in a decades-old American nonwoven fabric manufacturer. The move marks the group’s first manufacturing footprint outside India and signals a deliberate push to embed itself deeper into global technical textiles supply chains, a strategic shift worth watching closely.
With a market capitalization of approximately Rs. 11,300 crore, the shares of Arvind Limited were trading at Rs. 440.56; the shares went up by 13 percent on 7th May 2026 from the previous closing price of Rs. 389.70. The stock has a P/E of 27x.
Acquisition Update
AAML is acquiring 61 percent of Dalco-GFT at a valuation of 7.75x CY25 EV/EBITDA, which translates to $136 million. The remaining 39 percent stays with Dalco’s existing management and financial sponsor, who rolled over equity, a structure that signals the seller’s confidence in the combined entity’s trajectory. AAML has a defined pathway to acquire the residual stake within four years.
The deal is debt-financed: roughly $50 million is raised at the US entity on a non-recourse basis, and another $60 million is raised at AAML’s level. Management has committed to deleveraging over the next few years, with financial ratios described as within acceptable bounds even at peak leverage.
Why Dalco-GFT
Dalco-GFT is a $100 million revenue business operating two automated plants in North and South Carolina with a combined capacity of 75 million pounds annually. Its CY25 EBITDA margin stood at 17 percent with 40 percent ROCE and a 95 percent cash conversion ratio numbers that are meaningfully better than AAML’s own 15 percent EBITDA margin. The business serves over 75 customers across Automotive (68 percent of revenue), Geotextiles (15 percent), Industrial (9 percent), and Flooring & Furniture (8 percent), with 88 percent of positions on a sole-source basis.
Needle-punch nonwovens is a technology AAML already operates in India through its filtration product line, so there is genuine adjacency here, not a stretch into unfamiliar territory. The US market for this segment is estimated at $2.5 billion, and Dalco gives AAML an immediate manufacturing presence to serve domestic sourcing demand. Cross-sourcing opportunities between India and the US operations are intended to develop over time, subject to tariff and logistics conditions.
Business Overview
Arvind Limited, one of India’s oldest and most diversified textile conglomerates, traces its roots to 1931 and is listed on both BSE and NSE. The company operates across three core verticals, Textiles, Advanced Materials (AMD), and Retail, with a growing presence in defence, composites, and technical fabrics through its AMD arm.
In Q3 FY26, the company reported consolidated revenue of Rs. 2,373 crore (up 14 percent YoY), EBITDA of Rs. 286 crore (up 15 percent YoY), and PAT of Rs. 125 crore before exceptional items (up 17 percent YoY). The Advanced Materials division, AAML’s parent segment posted revenue of Rs. 496 crore in Q3 FY26, up 32 percent YoY, with EBITDA margins at 15.5 percent.
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