Kallam Textiles' Hydel Unit Faces Possession Notice from Union Bank of India

Kallam Textiles Limited, a prominent player in the textile industry, has recently encountered a significant development concerning its Hydel unit in Telangana. The company has disclosed crucial information that may impact its operations and stakeholders.

Possession Notice Served

Kallam Textiles Limited received a possession notice from Union Bank of India for its Hydel unit. The unit in question is located in Nelakondapalli, Khammam, Telangana. This notice was served under Section 13 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act, read in conjunction with Rule 8 of the said rules.

Company's Response

In compliance with regulatory requirements, Kallam Textiles has promptly informed the stock exchange about this development. The company, in its communication, stated that it would provide updates on any further developments related to this matter. This proactive approach aligns with the transparency expected of listed entities.

Regulatory Compliance

The intimation was made pursuant to Regulation 30 read with Schedule III of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. Additionally, it adheres to SEBI Circular No. SEBI/HO/CFD/CFD-PoD-1/P/CIR/2023/123 dated July 13, 2023, and the company's internal Policy on Determination of Materiality for Disclosure of Events or Information.

Details of the Notice

According to the LODR data, the possession notice was specifically served at the Hydel unit located in Nelakondapalli, Khammam, Telangana-507160. The company has also mentioned that a detailed copy of the notice served by Union Bank of India has been attached for reference.

Management Statement

Golagani Ramesh Kumar, the Company Secretary & Compliance Officer of Kallam Textiles Limited, signed the official intimation to the stock exchange. The company has committed to keeping the Exchange informed about any further developments regarding this matter.

Implications and Outlook

While the full implications of this possession notice are yet to be determined, it represents a significant event for Kallam Textiles Limited. Stakeholders and investors will likely be watching closely for any updates or resolutions regarding the Hydel unit's status and its potential impact on the company's operations.

As the situation unfolds, Kallam Textiles Limited's management appears to be maintaining a stance of transparency and regulatory compliance, which is crucial in navigating such challenges in the corporate landscape.

1 Day	5 Days	1 Month	6 Months	1 Year	5 Years
+8.20%	+5.41%	+4.87%	-10.50%	-33.39%	-40.90%

Kallam Textiles Limited , a prominent player in the textile industry, has reported a significant financial setback in its latest quarterly results. The company's financial performance for the quarter ended June 30 reveals mounting challenges and strategic shifts in its operations.

Financial Performance

Kallam Textiles reported a net loss of Rs 1,796.74 crore for the quarter ended June 30, nearly doubling from the Rs 937.01 crore loss recorded in the same period last year. The company's revenue from operations declined to Rs 4,579.13 crore, down from Rs 5,242.60 crore year-on-year, indicating a significant contraction in business activities.

Segment-wise Performance

The company's financial results provide a breakdown of its segment-wise performance:

Segment	Revenue (Rs in Lakhs)	Profit/(Loss) Before Tax and Interest
Spinning	2,547.61	(360.30)
Weaving	1,607.60	(395.62)
Dyeing	998.96	46.71
Solar Power	119.10	90.27
Hydel Power	1.86	(28.38)

The spinning and weaving segments, which form the core of Kallam Textiles' operations, reported substantial losses, while the dyeing and solar power segments showed marginal profitability.

Financial Distress and Debt Situation

The company is grappling with significant financial distress, reporting total outstanding dues to banks of Rs 29,981.16 crore as of June 30. This includes:

Interest on term loans and working capital loans: Rs 5,654.93 crore
Term loan installments: Rs 9,241.46 crore
Working capital loans (repayable on demand): Rs 15,084.75 crore

Banks have classified Kallam Textiles' loans as Non-Performing Assets (NPAs) and have initiated recovery proceedings under the SARFAESI Act. The company is currently in negotiations with lenders for loan restructuring.

Strategic Decisions

In a significant move, the Board of Directors has withdrawn its proposal to sell the company's Hydel unit. Instead, they have authorized Joint Managing Director G.V. Krishna Reddy to identify potential investors under a cutback arrangement with Union Bank of India and Indian Bank.

Going Concern and Auditor's Note

The company's auditors have highlighted a material uncertainty regarding Kallam Textiles' ability to continue as a going concern, citing continuous losses and loan defaults. However, the management remains confident about the company's future, basing their optimism on projected profitability and ongoing negotiations with banks.

Annual General Meeting

Kallam Textiles has scheduled its 33rd Annual General Meeting for September 18, where shareholders will have the opportunity to discuss the company's performance and future strategies.

As Kallam Textiles navigates through these challenging times, the company's ability to restructure its debt, improve operational efficiency, and attract new investments will be crucial for its recovery and future growth prospects.