Bannari Amman Spinning Mills Limited, a prominent player in the textile industry, has reported a significant turnaround in its financial performance for the first quarter. The company's strategic initiatives and cost management efforts have yielded positive results, marking a return to profitability.

Financial Highlights

• Profit After Tax (PAT): Rs 5.03 crore, compared to a loss of Rs 32.30 crore in the same quarter of the previous year
• Revenue: Rs 217.39 crore, a marginal increase of 0.7% year-over-year
• EBITDA Margin: Improved to 11.1% from 6.9% in the previous year

Key Developments

Successful Rights Issue

The company completed a rights issue, raising Rs 407.15 crore through the allotment of 1,50,79,504 equity shares at Rs 27 per share. This capital infusion is expected to strengthen the company's financial position and support future growth initiatives.

Cost Management

Bannari Amman Spinning Mills demonstrated effective cost control measures:

• Material costs declined by 21.2%
• Finance costs reduced by 8.7%

Solar Power Project

The Board of Directors has approved a 9.74 MW solar power project, with commissioning expected by October 2025. The company has already paid Rs 16 crore as an advance towards the project cost, highlighting its commitment to sustainable energy practices.

Asset Divestment

Bannari Amman Spinning Mills is in the process of selling its garment unit at Palladam and land at SIPCOT, Perundurai. The sale is pending lender approvals, and once completed, it may further optimize the company's asset portfolio.

Financial Table

The company's return to profitability, coupled with strategic initiatives such as the rights issue and the upcoming solar power project, signals a positive outlook for Bannari Amman Spinning Mills. The management's focus on cost optimization and sustainable practices appears to be yielding favorable results, positioning the company for potential growth in the coming quarters.

Bannari Amman Spinning Mills Limited (BASML) has successfully obtained shareholder approval for a significant corporate action through a postal ballot. The company's proposal to issue warrants convertible into equity shares to promoters and promoter group on a preferential basis has received the green light from its shareholders.

Voting Results

The postal ballot, which concluded on July 31, saw a substantial turnout with 49.66% of the total shares participating in the voting process. Out of the company's 79,921,375 total shares, 39,685,386 votes were cast. The voting results revealed strong support for the resolution:

Key Highlights

• The special resolution passed with an overwhelming majority, securing 99.97% of the total votes cast in favor.
• Promoter and promoter group, holding 39,602,346 shares, voted unanimously in support of the resolution.
• Public institutions, though with a smaller shareholding, also showed complete support with all 70 votes in favor.
• Public non-institutional shareholders demonstrated strong backing with 83.29% voting in favor, despite some opposition.

Scrutinizer's Report

R Dhanasekaran, a practicing Company Secretary, acted as the scrutinizer for the postal ballot process. The scrutinizer's report, dated July 31, confirmed the voting results and the passage of the resolution.

Company Information

Bannari Amman Spinning Mills Limited, with its registered office in Coimbatore, Tamil Nadu, operates in the textile sector. The company had 25,683 shareholders on record as of June 30.

Implications

The approval for issuing warrants convertible into equity shares to the promoter group signifies a potential increase in promoter stake and could lead to an infusion of additional capital into the company. This move may have implications for the company's capital structure and future growth strategies.

Investors and market participants will likely keep a close watch on the execution of this warrant issuance and its impact on the company's shareholding pattern and financial position in the coming months.