Gokak Textiles Limited has formally closed its Garment Division (Knitwear Unit) located at Marihal Village, Belagavi, Karnataka, effective October 6, 2026. The closure follows a statutory process under the Industrial Disputes Act, 1947 and Industrial Relations Code, 2020.

Closure Process and Timeline

  • The management filed an application for closure with the State Government on July 6, 2026, under Section 25-O of the Industrial Disputes Act, 1947 read with Section 80 of Industrial Relations Code, 2020
  • The application proposed closure effective October 6, 2026 (after 90 days from application date)
  • The Additional Labour Commissioner, Bengaluru conducted a meeting on August 5, 2026, and issued a letter dated August 6, 2026
  • The Government of Karnataka, Labour Department did not issue any order granting or refusing permission within the statutory 60-day period from July 6, 2026
  • Under Section 25-O(3) of the Industrial Disputes Act, 1947 read with Section 80(3) of Industrial Relations Code, 2020, permission for closure is deemed granted upon expiry of the 60-day period
  • Consequently, the service of all workers stands terminated effective October 6, 2026

Financial Impact of the Division

For FY 2025-2026:

  • Turnover of the knitwear business/unit: ₹422.73 lakhs (4.23 crore)
  • Percentage of total revenue from operations: 9.76%
  • Net worth of the knitwear business/unit: Negative ₹(4,192.55) lakhs (Negative ₹41.93 crore)
  • Contribution to company's total negative net worth of ₹(19,423.50) lakhs: 21.58%

Asset Disposal Plans

The company had previously entered into a binding agreement for sale of the unit:

  • Agreement date: September 9, 2025
  • Counterparty: M/s V. G. Parekh & Co., Vijayapura, Karnataka (real estate development business)
  • Sale consideration: ₹19.50 crore
  • Transaction basis: "as is where is what is" basis
  • The buyer does not belong to promoter/promoter group/group companies
  • Not a related party transaction
  • The company will comply with Regulation 37A of LODR Regulations before selling the unit

Unit Background and Closure Reasons

The Garment Division:

  • Located on 15.65 acres of freehold land including utilities
  • Established in 1995, initially catering exclusively to export markets
  • Specialized garmenting machines (fabric dyeing, knitting) were shifted to Mills Division at Gokak Falls, Karnataka in 2015-16
  • Only cutting and stitching facilities remained at Marihal location
  • These facilities have now been shifted to Mills Division at Gokak Falls, Karnataka

Reasons for closure include:

  • 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

Worker Settlement

The management has assured full and final settlement of all dues, including closure compensation, in accordance with applicable labor laws and statutory requirements.

Historical Context

The closure process has been ongoing since 2025:

  • September 9, 2025: Board approved sale and signed agreement with V.G. Parekh & Co.
  • January 27, 2026: Sale completion postponed from January 2026 to April 2026 due to process delays
  • May 7, 2026: Sale completion further postponed by three months (to July 2026)
  • August 11, 2026: Board approved permanent closure and subsequent sale/disposal
  • October 6, 2026: Unit formally closed

The property valuation as of May 15, 2025 was ₹21.49 crore for land, building and machinery.