Gokak Textiles Limited has permanently closed its Garment Division (Knitwear Unit) at Marihal village in Belagavi district, bringing an end to operations at the unit established three decades ago.
The closure took effect on October 6, 2026, after the company’s application for closure permission was not acted upon by the Karnataka Labour Department within the statutory period. The company said the permission was therefore deemed to have been granted under the applicable provisions of the Industrial Disputes Act, 1947, read with the Industrial Relations Code, 2020.
Gokak Textiles had submitted its closure application to the Karnataka Government on July 6, 2026, under Section 25-O of the Industrial Disputes Act, 1947, read with Section 80 of the Industrial Relations Code, 2020. As no order granting or refusing permission was received within 60 days, the company treated the closure permission as deemed approval.
The services of all workmen at the unit stand terminated with effect from October 6. The company has stated that statutory dues, including closure compensation, will be settled in accordance with applicable labour laws.
Unit had been struggling for years
The Marihal knitwear unit was established in 1995, initially to cater primarily to export markets. Over the years, part of its production was also sold in the domestic market through third-party outlets and under the company’s own brands.
However, the unit’s operations had gradually been scaled down. Gokak Textiles shifted specialised machinery, including fabric dyeing and knitting equipment, to its Mills Division at Gokak Falls in FY2015-16. The Marihal facility was subsequently left with mainly cutting and stitching operations.
The company cited several factors behind the closure, including structural cost disadvantages, operational unviability, adverse conditions in the textile industry, obsolete machinery, high maintenance costs, industrial relations issues, electricity and water supply problems, and environmental and regulatory restrictions.
Unit contributed ₹4.23 crore in FY26
According to the company’s disclosure to the BSE, the knitwear business generated ₹422.73 lakh (₹4.23 crore) in FY2025-26, accounting for 9.76% of Gokak Textiles’ revenue from operations.
However, the unit had a negative net worth of ₹4,192.55 lakh (₹41.93 crore) as of March 31, 2026. This represented 21.58% of the company’s overall negative net worth of ₹19,423.50 lakh.
15.65-acre property to be sold for ₹19.50 crore
The closure is linked to an earlier decision to dispose of the Marihal property. Gokak Textiles had entered into an agreement with M/s V. G. Parekh & Co., Vijayapura, on September 9, 2025, for the sale of the land, buildings and machinery.
The agreed consideration is ₹19.50 crore. The buyer is engaged in real estate development and is not part of the promoter or promoter group. The transaction is not a related-party transaction.
The property comprises 15.65 acres of freehold land, along with the buildings, utilities and remaining machinery. The sale is proposed on an “as is where is, what is” basis and remains subject to the applicable regulatory requirements.
The company’s August 2026 disclosure had already recorded the permanent closure and subsequent sale of the Marihal knitwear unit as part of its restructuring plan. The latest development confirms that the statutory closure has now taken effect.
For Belagavi, the closure marks the end of a garment manufacturing operation that had been part of the city’s industrial landscape since 1995, while the 15.65-acre property is now set to change hands for ₹19.50 crore.