Bhandari Hosiery Finalizes Rights Issue, Boosts Equity Capital to ₹332.96 Crore

Bhandari Hosiery Exports Limited has approved the allotment of 92,906,781 equity shares from its recent rights issue. Priced at ₹2.56 per share, this move significantly increases the company's paid-up equity capital from ₹240.00 crore to ₹332.96 crore. The formal approval occurred on March 23, 2026.

Purpose of Capital Infusion

The capital raised is intended to strengthen Bhandari Hosiery's financial foundation. The rights issue, announced in February 2026, aimed to raise up to ₹49.30 crore. Key objectives included bolstering working capital by ₹34 crore, reducing long-term loans by ₹6.87 crore, and allocating funds for general corporate purposes.

Company's Financial Landscape

Bhandari Hosiery operates in a competitive textile export market and has faced financial pressures. These include a noted decline in its share price and a historically significant debt burden. The company's interest coverage ratio has remained low, and sales growth has been sluggish over the past five years.

Impact on Share Structure

The allotment alters the company's equity structure. The increase in paid-up equity share capital will be reflected on stock exchanges once the new shares are listed. This higher share count may affect earnings per share (EPS) calculations for existing shareholders.

Risks and Dilution

Investors should consider the potential dilution of their stake resulting from the rights issue. Additionally, Bhandari Hosiery's financial indicators, such as an increase in debtor days from 95.5 to 116, warrant attention.

Market Position

In the crowded Indian textile and apparel sector, Bhandari Hosiery's market capitalization, around ₹110.61 crore, is considerably smaller than industry leaders. The company's Price to Book Value of 0.53 suggests it trades below its book value, a contrast to some larger peers with higher valuations.

What to Monitor Next

Key developments to track include the official listing of the newly allotted shares. Investors will also want to see how effectively Bhandari Hosiery utilizes the raised funds to improve working capital and reduce debt, and monitor its future financial performance in sales growth and profitability.