Morton Foods Completes Rights Issue, Ceases to be Material Subsidiary of Palash Securities

Palash Securities Limited has announced that Morton Foods Limited, its former material unlisted subsidiary, has successfully completed a rights issue, raising Rs. 10.26 crores. This corporate action has led to significant changes in the ownership structure and subsidiary status of Morton Foods.

Rights Issue Details

Aspect	Details
Total Shares Allotted	44,61,454
Issue Price	Rs. 23.00
Face Value	Rs. 10.00
Premium	Rs. 13.00
Total Amount Raised	Rs. 10,26,13,442.00

Impact on Ownership

The rights issue has had a notable impact on the ownership structure of Morton Foods:

Palash Securities Limited declined to participate in the rights issue.
As a result, Palash Securities' shareholding in Morton Foods has reduced to 44.95%.
Consequently, Morton Foods ceased to be a material unlisted subsidiary of Palash Securities.

Corporate Communications

Both companies have made formal announcements regarding this development:

Morton Foods Limited: Informed Palash Securities about the completion of the rights issue and the subsequent change in subsidiary status.
Palash Securities Limited: Filed an intimation under Regulation 30 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, notifying the stock exchanges about Morton Foods ceasing to be its material unlisted subsidiary.

This corporate action demonstrates the dynamic nature of ownership structures in the business world and highlights the importance of rights issues as a means of raising capital. The decision of Palash Securities to not participate in the rights issue has led to a significant change in its relationship with Morton Foods.

1 Day	5 Days	1 Month	6 Months	1 Year	5 Years
+0.30%	-1.50%	-3.85%	-6.31%	-29.40%	+269.12%

Palash Securities Limited , a diversified company with interests in investing and food processing businesses, has reported a consolidated net loss of ₹274.19 lakhs for the quarter ended September 30, 2025 (Q2 FY26). This marks an improvement from the net loss of ₹296.16 lakhs reported in the corresponding quarter of the previous year.

Financial Performance

The company's consolidated financial results for Q2 FY26 reveal several key points:

Particulars (₹ in lakhs)	Q2 FY26	Q2 FY25	Change (%)
Total Income	2,563.26	1,575.03	+62.74
Total Expenses	2,668.07	1,659.94	+60.73
Profit/(Loss) before tax	(104.81)	(84.91)	-23.44
Net Profit/(Loss) after tax	(274.19)	(296.16)	+7.42

Total income for the quarter increased significantly by 62.74% year-over-year to ₹2,563.26 lakhs.
However, total expenses also rose by 60.73% to ₹2,668.07 lakhs.
The loss before tax widened to ₹104.81 lakhs, compared to ₹84.91 lakhs in Q2 FY25.
Net loss after tax slightly improved to ₹274.19 lakhs from ₹296.16 lakhs in the same quarter last year.

Segment Performance

Palash Securities operates in two main segments:

Investing Business:
- Revenue: ₹331.90 lakhs
- Segment Result: Profit of ₹325.84 lakhs
Food Processing Business:
- Revenue: ₹2,210.76 lakhs
- Segment Result: Loss of ₹343.95 lakhs

The food processing business, while contributing significantly to revenue, continues to face challenges, reporting a segment loss.

Standalone Results

On a standalone basis, Palash Securities reported a net loss of ₹57.93 lakhs for Q2 FY26, compared to a profit of ₹40.54 lakhs in the same period last year. The standalone results show:

Total income of ₹370.18 lakhs
Total expenses of ₹9.15 lakhs
Profit before tax of ₹361.03 lakhs
Net loss after tax of ₹57.93 lakhs due to tax expenses

Subsidiary Performance

The company's subsidiary, Morton Foods Limited, continues to face financial challenges. As per the auditor's report:

Morton Foods Limited incurred a net loss of ₹429.16 lakhs for Q2 FY26.
The subsidiary's net worth has substantially eroded, raising concerns about its ability to continue as a going concern.
The management, however, maintains a positive outlook towards the growth and future of Morton Foods Limited.

Balance Sheet Highlights

As of September 30, 2025, the consolidated balance sheet shows:

Total Assets: ₹69,276.21 lakhs
Total Equity: ₹59,096.74 lakhs
Total Liabilities: ₹10,179.47 lakhs

Conclusion

While Palash Securities Limited has seen growth in its total income, the company continues to face challenges, particularly in its food processing segment. The performance of its subsidiary, Morton Foods Limited, remains a concern. The company's strong equity position may provide some stability as it navigates these financial headwinds.

Investors and stakeholders may want to monitor the company's efforts to improve profitability, particularly in its food processing business, and the steps taken to address the financial situation of Morton Foods Limited in the coming quarters.