Rama Paper Mills Ltd faces severe financial distress as it undergoes the Corporate Insolvency Resolution Process (CIRP) under the NCLT. Operations are currently shut due to working capital shortages, with the company reporting a net loss of Rs 6.14 crore for FY 2025-26. A resolution plan from Poddar Global Limited is currently awaiting NCLT approval.
Rama Paper Mills Reports Operational Shutdown Amid CIRP Proceedings
Revenue: Rs 1.41 crore | Net Loss: Rs 6.14 crore
Reader Takeaway: Company operations are completely stalled due to lack of working capital; resolution plan awaits NCLT approval.
What just happened
Rama Paper Mills Ltd has disclosed in its 41st Annual Report for FY 2025-26 that it is currently undergoing the Corporate Insolvency Resolution Process (CIRP). The NCLT (Allahabad Bench) initiated these proceedings on June 7, 2024, following a petition by Amar Ujala Limited. Mr. Sandeep Kumar Agrawal has been appointed as the Resolution Professional (RP), and the authority of the Board of Directors remains suspended.
Why this matters
The company’s operations are currently in 'shut mode' due to an acute shortage of working capital. The financial state of the firm has deteriorated significantly, with revenue dropping from Rs 6.88 crore in FY 2024-25 to just Rs 1.41 crore in the current fiscal year. The company is grappling with a negative net worth of Rs 51.15 crore.
Resolution Progress
A previous resolution plan submitted by Ujala Renewable LLP was set aside by the NCLT. A fresh bidding process has since occurred, and the Committee of Creditors (CoC) has now approved a plan submitted by Poddar Global Limited. This plan is currently pending final approval from the NCLT.
Risks and Auditor Concerns
Statutory auditors, Jagdish Chand & Co., have issued a qualified opinion, citing material uncertainty regarding the company’s status as a 'going concern.' Key issues include:
- Failure to account for Rs 9.91 crore in interest on Inter-Corporate Deposits.
- Lack of physical verification for property, plant, and equipment.
- Non-compliance with the MSMED Act regarding the classification of trade payables.
What to track next
The 41st Annual General Meeting is scheduled for September 30, 2026. Investors should monitor the NCLT docket for the final ruling on the resolution plan submitted by Poddar Global Limited, which remains the primary path toward potential corporate restructuring.