Textile penny stock below Rs 5 gets approval to raise Rs 45 crore through rights issue; declares robust earnings numbers

The proceeds from the Rights Issue will be used to strengthen its working capital, thereby boosting growth.

Globe Textiles (India) Limited, a prominent force in the textiles and apparel industry, has announced its Rights Issue, offering eligible shareholders a valuable opportunity to improve their engagement and equity ownership in the company.

The company seeks to raise up to Rs 45.04 crore through the Rights Issue to support strategic investments aimed at long-term growth, including initiatives in R&D, product development, and market expansion. The proceeds from the Rights Issue will also be used to strengthen its working capital, thereby boosting growth.

Funds to Bolster Company’s Growth Through Strategic Investments

• Right Issue Price: Rs 3 per Rights Equity Share vs Rs 4.68 close price on January 13, 2025.
• Rights Equity Shares in the Ratio: 1 (One) Equity Share for every 2 (Two) fully paid-up Equity Share held.
• Rights Issue Period: January 24, 2025, to February 6, 2025.
• Record Date: January 17, 2025.

The Rights Equity Shares are being offered to eligible shareholders on a rights basis in the ratio of 1 (One) Rights Equity Share for every 2 (Two) fully paid-up Equity Share held. This presents an exciting chance for investors to participate in the offering within the designated period, providing an opportunity to purchase company shares at a favourable price.

Earnings Report
The company reported a net profit of Rs 3.81 crore in September 2024, up by 102.20 per cent compared to Rs 1.88 crore in September 2023. Revenue also grew by 35.12% during the same period.

For the quarter ending June 2024, the company achieved a net profit of Rs 2.71 crore, an 85.48 per cent increase compared to Rs 1.46 crore in June 2023. The company seeks to sustain this momentum through strategic initiatives focused on driving sustained growth and profitability.

Management Comments
Bhavik Parikh, Chairman and Managing Director of Globe Textiles, stated: “The Company’s Rights Issue demonstrates our dedication to responsible growth and financial resilience. By offering existing shareholders a chance to increase their stake, we acknowledge their faith while securing vital funds for strategic expansion and the acquisition of companies that promote sustainable growth and environmentally friendly work practices. This strategic initiative aligns with our commitment to creating long-term value for all stakeholders and capitalizing on growth opportunities.”

Should You Invest?
The Rights Issue offers an attractive opportunity for existing shareholders to acquire additional equity at a discounted price, enabling them to enhance their ownership in a growing company. With a strong focus on R&D, market expansion, and financial resilience, Globe Textiles is positioning itself for sustained growth.

However, potential investors should assess their risk appetite, considering the inherent risks associated with the textiles sector and market volatility, before making an investment decision.

Disclaimer: The article is for informational purposes only and not investment advice.