KG Denim Limited , a prominent player in the textile industry, has announced significant corporate actions following a meeting of its Board of Directors on November 21, 2025. The company has made two key decisions regarding its capital structure:

Warrant Allotment Deferred

The Board of Directors has decided to defer the allotment of 13,47,000 warrants that were convertible into equity shares. This decision suggests a temporary pause in the company's plans to potentially expand its equity base through the conversion of these warrants.

Preference Share Issuance

In a separate move, KG Denim informed that it plans to proceed with a preferential allotment of preference shares. The details of this allotment are as follows:

This preferential allotment of preference shares indicates that KG Denim is looking to raise capital without immediately diluting its equity. The non-convertible nature of these shares means they will not be converted into common stock in the future, preserving the current equity structure of the company.

The cumulative and redeemable features of these preference shares suggest that:

1. Dividends will accumulate if not paid in any year
2. The company has the option to buy back these shares in the future

Implications for Investors

These corporate actions may have several implications for KG Denim and its stakeholders:

1. Capital Structure: The deferment of warrant conversion and the issuance of preference shares indicate a strategic approach to capital management.
2. Investor Returns: The 6% dividend rate on the preference shares provides a fixed income opportunity for investors in these instruments.
3. Future Outlook: The company's decision to raise funds through preference shares rather than equity might suggest a focus on maintaining the current ownership structure while still securing additional capital.

The company has stated that this information will be made available on its official website at www.kgdenim.com for public reference.

KG Denim , a prominent player in the textile industry, has announced significant financial decisions and released its first quarter results. The company's board of directors has approved two fund-raising initiatives totaling Rs 12.29 crore and disclosed its financial performance for the quarter ended June 30.

Fund Raising Initiatives

The board has given the green light to two major fund-raising proposals:

1. Convertible Warrants Issue: The company will issue 13,47,000 convertible warrants at Rs 17 per warrant to promoter Sri B. Sriramulu. This move is expected to raise Rs 2.29 crore. These warrants are convertible into equity shares within 18 months from the date of allotment.

2. Preference Shares Issue: The board has approved the issuance of 10,00,000 unlisted 6% Non-convertible Cumulative Redeemable Preference Shares (NCRPS) at Rs 100 each to promoters. This initiative will raise Rs 10.00 crore. The preference shares will be redeemable in three equal installments in the 6th, 7th, and 8th years from the allotment date.

Upon full conversion of the warrants, Sri B. Sriramulu's shareholding in the company would increase from the current 8.61% to 13.18% on a fully diluted basis.

Q1 Financial Results

KG Denim has also released its unaudited financial results for the quarter ended June 30:

The company reported a consolidated net loss of Rs 325.00 lakhs for Q1, compared to a net loss of Rs 261.00 lakhs in the same quarter of the previous year. The total income for the quarter stood at Rs 9,375.00 lakhs, showing a slight decrease from Rs 10,051.00 lakhs in Q1 of the previous year.

Other Key Developments

• The company's Annual General Meeting is scheduled for September 9, where shareholder approval will be sought for the fund-raising proposals.
• KG Denim has successfully implemented the RBI restructuring package as per Master Directions on natural calamities. However, South Indian Bank, one of the consortium lenders holding 7% and one NBFC to whom Rs 6.50 crore is outstanding as on date, have dissented from the restructuring scheme.
• The company has filed a writ petition before the Hon'ble High Court of Madras against any coercive action, which has given injunction orders.
• Some trade creditors have approached the National Company Law Tribunal (NCLT) for recovery of their dues, amounting to Rs 2,125.00 lakhs as of June 30. The company is actively negotiating with these creditors for amicable settlements.

KG Denim's strategic fund-raising initiatives, coupled with its efforts to manage financial challenges, demonstrate the company's proactive approach to strengthening its financial position and navigating through the current market conditions.