Kallam Textiles Ltd has been fined ₹1,71,100 by BSE for failing to submit audited financial results for the quarter and financial year ended 31 March 2026 within the prescribed regulatory timeline. The exchange levied the penalty under the SEBI Standard Operating Procedure for alleged non-compliance with Regulation 33 of the SEBI (LODR) Regulations, 2015.

The total penalty includes a basic fine of ₹1,45,000 plus applicable GST of ₹26,100. BSE communicated the levy via an email dated 30 June 2026, referencing the SEBI Master Circular regarding penal actions for non-compliance. The fine structure is calculated at ₹5,000 per day until the date of compliance.

The company attributed the delay in submission to circumstances arising from the ongoing Corporate Insolvency Resolution Process (CIRP). Specific challenges cited include difficulties in collating and reconciling financial information, the completion of statutory audit procedures, and other operational hurdles during the insolvency resolution process.

Prior to receiving the penalty notice, Kallam Textiles Ltd had submitted a request to BSE on 27 May 2026 seeking an extension of time and explaining the reasons for the delay. Following the imposition of the fine, the company stated it is requesting BSE to waive the levied amount.

BSE has directed the company to pay the fine within 15 days from the date of the communication. Failure to remit the payment may result in the exchange initiating action to freeze the entire shareholding of the promoter and other securities held in the promoter's demat account. Additionally, a second consecutive year of non-compliance for Regulation 33 could lead to the company being transferred to the Z group and suspension of trading in its equity shares.

The National Company Law Appellate Tribunal (NCLAT), Chennai Bench, has stayed the Corporate Insolvency Resolution Process (CIRP) against Kallam Textiles Ltd , allowing the company time to reformulate and submit a restructuring proposal. The order, dated 18 June 2026, directs the Committee of Creditors to evaluate the plan within four weeks to maximize value and prevent business erosion. The tribunal has ruled that the Interim Resolution Professional and the Committee of Creditors shall not proceed further with the CIRP process until a decision on the restructuring proposal is reached.

The appeal was filed by GV Krishna Reddy, a suspended director of Kallam Textiles, challenging an order dated 06 April 2026 by the NCLT, Amaravati Bench. The NCLT had admitted a Section 7 application filed by Union Bank of India, a financial creditor, to commence CIRP against the textile manufacturer. The appellant argued that the company is a fully operational, commercially viable entity that was classified as a Non-Performing Asset (NPA) on 29 June 2023 due to COVID-19-related cash flow issues.

Counsel for the appellant stated that the company employs approximately 400 people directly and over 2000 indirectly. They detailed efforts to resolve the crisis, including adhering to a Cut-Back Arrangement with Union Bank of India in December 2024 and submitting restructuring proposals under the MSME Scheme in March 2026. The appellant also noted that a prospective investor, Classic Solvent Pvt. Ltd., was brought in August 2025 but was rejected by the bank.

Union Bank of India opposed the stay, arguing that the loan sanctioned exceeds ₹25 crores, precluding special considerations under MSME revival guidelines. The bank's counsel emphasized that recent amendments to the Insolvency and Bankruptcy Code prevent settlements with a single party and that any proposal must be considered by the Committee of Creditors. The Interim Resolution Professional confirmed that the Committee of Creditors had been constituted and expressions of interest had been called for.

The NCLAT observed that the Corporate Debtor is a fully operational entity and that proceeding with CIRP could lead to value erosion. Consequently, the tribunal disposed of IA No.820/2026, which sought the stay, and listed the appeal for hearing on 12 August 2026. The company has disclosed that business operations will continue during this period.