Vardhman Polytex to raise ₹120 crore via rights issue

Vardhman Polytex has announced plans to raise up to ₹120 crore through a rights issue of equity shares. In addition, the textile company will issue warrants amounting to ₹90.9 crore. A rights issue is typically used to boost a company’s financial position and fund future growth initiatives.

According to Investopedia, a warrant is a derivative that gives the holder the right but not the obligation to buy an underlying security at a certain price, quantity, and future time. The security represented in the warrant is usually company stock and is delivered by the issuing company, the website added.

Vardhman Polytex’s standalone net sales dropped by 35.99% to ₹64.40 crore in the September quarter of the financial year 2024-25, compared to ₹100.60 crore in September 2023, reflecting weaker revenue generation.

However, quarterly net profit surged by 101.85% to ₹0.63 crore from a loss of ₹34.07 crore in the same period last year, marking a significant turnaround.

EBITDA also jumped 130.08% to ₹5.55 crore, up from ₹18.45 crore in September 2023, showcasing improved operational efficiency.

Shares of Vardhman Polytex, a microcap player, dropped nearly 4.3% in trade today, settling at ₹12.75 apiece. So far this year, the stock has surged nearly 120%, while the one-year gain is almost 107%.