Synopsis:
Padam Cotton Yarns Ltd announced a rights issue to raise Rs. 32.4 crore, approved by the Board on October 9, 2025. The issue will offer equity shares to eligible shareholders, subject to regulatory approvals.
The shares of a Penny stock company, specializing in cotton yarn manufacturing, with a strong focus on the lifestyle sector, including enhancing its product offerings in readymade garments and fashion trends, almost hit a 5 percent upper circuit following the approval for the Rights Issue from the Board.
With a market capitalization of Rs. 62.10 crores on Friday, the shares of Padam Cotton Yarns Ltd almost hit a 5 percent upper circuit, making a high of Rs. 5.00 per share compared to its previous closing price of Rs. 4.78 per share.
What Happened
Padam Cotton Yarns Ltd, engaged in cotton yarn manufacturing with a strong focus on the lifestyle sector, including enhancing its product offerings in readymade garments and fashion trends, has announced in their recent company filing that their Board of Directors, in a meeting held on October 9, 2025, approved a rights issue to raise up to Rs. 32.4 crore by issuing equity shares of face value Rs. 1 each.
The rights issue will be offered to eligible shareholders on a record date, which will be notified later. The issuance will be subject to necessary regulatory and statutory approvals and in line with applicable provisions of the Companies Act and SEBI regulations. The Board will determine the terms of the issue at a later stage.
Financial & Others
The company’s revenue rose from Rs. 0 to Rs. 13.71 crores with a significant change in Q1FY25-26. Meanwhile, Net loss from Rs. 0.01 crores turned to a profit of Rs. 2.03 crores during the same period.
The company has demonstrated strong financial performance, achieving an impressive 111% CAGR in profit growth over the past 5 years. With a Return on Capital Employed (ROCE) of 24.2% and a Return on Equity (ROE) of 20.0%, it highlights its effective use of capital and efficient operations.
Additionally, the company’s stock trades at a Price-to-Earnings (P/E) ratio of 3.95, significantly lower than the industry average of 22.4, indicating potential undervaluation. With a low PEG ratio of 0.03 and a debt-to-equity ratio of just 0.03, it reflects a strong financial position with minimal leverage.
Padam Cotton Yarns Limited (PCYL), established in 1994 and based in Karnal, Haryana, is an Indian public limited company that manufactures cotton and blended yarns. It is listed on the BSE and engages in various business activities, including the manufacturing of yarns, the trading of agricultural implements and pumps, and providing textile-related consultancy. The company has a history of focusing on customer-focused manufacturing and aims for high quality and innovation in its products and operations.
The company primarily manufactures cotton and blended yarns. In addition, the company engages in trading agricultural implements, pumps, and motors, and offers consultancy services within the textile industry.
Written by Sridhar J
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