Although Iran’s well-developed equity market is considered one of the advantages of the country’s economy, textile companies generally seem reluctant to offer shares in Tehran Stock Exchange.
As the only textile firms listed in TSE are a few major mills founded before the 1979 Islamic Revolution, post-revolution textile factories, which are mostly small- and medium-sized enterprises, often hesitate when it comes to offering shares.
Alireza Haeri, a board member at Iran Textile Specialists Association, attributes the textile firms’ reluctance to take part in the bourse to the unwillingness of industrialists to operate in a transparent manner, which is required by the equity market, the Persian daily Forsat-e Emrooz reported.
“To take part in the equity market, companies are required to have clear fiscal statements and provide details of their activities to TSE,” he said.
“Many of the businesses active in the textile industry are disinclined to such ways of transparency,” he said.
Secretary of the Association of Iranian Textile Industries Mohammad Moravvej Hosseini, however, believes the absence of textile businesses in TSE is not only because of their unwillingness, but is also due to “cumbersome regulations of the stock market”.
“If the regulations were to be eased, many prominent companies will be keen to seize the advantages offered by TSE,” Hosseini added, hoping that the government will adopt deregulation policies in the near future.
Experts believe mergers and acquisitions can help textile firms move closer to the equity market with the added advantage of lowering their production costs.
Iran’s textile industry accounts for 13% of total employment in the industrial sector, as it directly employs 280,000 people.
