Through subscription of preferential warrants allocation, the creators of Arvind Mills Ltd are ready to expand their shareholding in the textiles company by about 13 per cent from the subsisting 33 per cent.

In a statement to the stock markets, the company said that the founders of the company would pay a regular contribution to 50.6 million warrants, transformable into equity within the 18 months at Rs 52 per share.

On conversion, the originators’ stake would increase to 46.77 per cent from 33.9 per cent on conversion. It will cost the promoters around Rs 263 crore.

The finances are to be meant for the company’s retail and brands’ growth.

Arvind is the newest in companies list whose promoters have been rescaling their stake through warrant issues. Tata Sons, the Tata Group’s major investment vehicle has declared its judgment to raise its holding in Tata Steel.

The Aditya Birla Group has done similarly in Hindalco and Mukesh Ambani has accompanied this way to rescale its stake in Reliance Industries.

According to the industrial sources, the warrants path is favored over a direct equity purchase as promoters are needed to disburse just 10% upfront whereas the balancing amount can be paid up at the time of exchange of the warrants.

Arvind Mills said that the authorised share capital of the company would go up to Rs 450 crore after the conversion of the warrants.

Sanjay S Lalbhai, who has been nominated chairman with immediate effect, to succeed Arvind N Lalbhai who passed away last month, said, “The company is trying to manage the challenge in its core fabrics and garments business against the backdrop of a rising rupee. There is requirement of funds for the growth of the business as well as to augment the net worth.”

Arvind that sells brands including Arrow, Excalibur and Tommy Hilfiger, is relaunching various brands. It is also rising its retail network to cash in on the retail boom sweeping across the country.