NewsCorporate ActionsTuni Textile Mills Announces Rs 42.32 Crore Rights Issue and Reports Q2 Financial ResultsTuni Textile Mills Announces Rs 42.32 Crore Rights Issue and Reports Q2 Financial Results
Tuni Textile Mills Limited has approved a rights issue of 42,32,44,440 equity shares at Re. 1 per share, aiming to raise Rs 42.32 crore. The rights entitlement is 81 shares for every 25 existing shares, with the issue opening on November 24 and closing on December 8. The company also reported Q2 financial results, with revenue from operations at Rs 2,984.69 lakhs and a net profit of Rs 20.45 lakhs. The rights issue is seen as a strategic move to strengthen the company's capital base and support growth initiatives.
*this image is generated using AI for illustrative purposes only.
Tuni Textile Mills Limited has unveiled plans for a significant rights issue and released its financial results for the second quarter. The company's board has approved a rights issue aimed at raising Rs 42.32 crore, while also reporting a modest profit for Q2.
Rights Issue Details
The board of Tuni Textile Mills has approved a rights issue of 42,32,44,440 equity shares at a price of Re. 1 per share. This move is set to inject Rs 42.32 crore into the company, assuming full subscription. Key details of the rights issue include:
| Aspect | Details |
|---|---|
| Rights Entitlement | 81 shares for every 25 existing shares |
| Record Date | November 15 |
| Issue Opening Date | November 24 |
| Issue Closing Date | December 8 |
| Pre-Issue Shares | 13,06,31,000 |
| Post-Issue Shares | 55,38,75,440 (assuming full subscription) |
The rights issue represents a significant expansion of the company's equity base, with the number of outstanding shares potentially more than quadrupling if fully subscribed.
Q2 Financial Performance
For the quarter ended September 30, Tuni Textile Mills reported the following unaudited financial results:
| Financial Metric | Amount (Rs in Lakhs) |
|---|---|
| Revenue from Operations | 2,984.69 |
| Net Profit | 20.45 |
| Inventory | 3,669.74 |
| Trade Receivables | 2,242.17 |
The company's performance shows a positive net profit, albeit modest in comparison to its revenue. The substantial inventory and trade receivables figures suggest a focus on maintaining stock and managing credit sales.
Management's Perspective
Narendra Kr. Sureka, Managing Director of Tuni Textile Mills, stated in the company's disclosure, "The rights issue is a strategic move to strengthen our capital base and support our growth initiatives. We believe this will provide our shareholders with an opportunity to increase their stake in the company at an attractive price."
Market Implications
The rights issue, priced at par value, offers existing shareholders an opportunity to increase their holdings without a premium. This could be seen as a value proposition for current investors, but it also implies a significant dilution of ownership if not fully subscribed.
The company's decision to raise capital through a rights issue, rather than other means, suggests a preference for maintaining control within the existing shareholder base while bolstering its financial position.
Investors and market watchers will likely keep a close eye on how this capital raise impacts Tuni Textile Mills' future operations and financial performance, particularly in light of the modest profit reported in the recent quarter.
As the textile industry continues to face challenges and opportunities in the evolving economic landscape, Tuni Textile Mills' move to strengthen its capital structure could be pivotal in positioning itself for future growth and competitiveness in the market.
Historical Stock Returns for Tuni Textile Mills
| 1 Day | 5 Days | 1 Month | 6 Months | 1 Year | 5 Years |
|---|---|---|---|---|---|
| -3.91% | -10.87% | +33.70% | +18.27% | +1.65% | +459.09% |
19
