Mohite Industries has initiated a postal ballot to secure approval for the sale of its spinning unit, which contributed over 85% of its FY26 income. The divestment is a strategic move to eliminate a loss-making segment, reduce debt by Rs 78.21 crore, and pivot focus toward its hydro power operations. Shareholders must vote via e-voting between October 31 and November 29, 2026, with the transaction's success contingent on majority public shareholder support.
Mohite Industries Proposes Sale of Primary Spinning Unit
Book value of the spinning unit stands at Rs 44.26 crore with a debt repayment goal of Rs 78.21 crore.
Reader Takeaway: The company aims to shed its loss-making spinning business to slash debt and pivot toward its hydro power project.
What just happened
Mohite Industries has issued a postal ballot notice seeking shareholder approval for the sale of its spinning unit located in Kolhapur. The proposed sale includes 37 acres of land, factory structures, and all plant and machinery. The company is also moving its registered office to Nagala Park, Kolhapur, as the current premises are part of the asset up for sale. Voting via remote e-voting is scheduled from October 31 to November 29, 2026.
Why this matters
The spinning unit represents a massive portion of the company’s operations, contributing 85.81% of total income in FY26. Management intends to use the sale proceeds to settle Rs 78.21 crore in outstanding debt owed to Bank of Baroda, LIC Housing Finance, and other lenders. This is a critical restructuring effort to de-leverage the balance sheet and exit a business that requires heavy capital expenditure to remain competitive.
The backstory
Historically, the spinning unit has been a loss-making segment for the firm. By divesting these assets, Mohite Industries plans to eliminate this drag on profitability and shift its management focus toward its hydro power project, which the company identifies as a higher-margin business segment. The company has confirmed that it will seek buyers at arm's length from unrelated parties.
Risks to watch
Investors should be aware that the spinning unit is currently the company's primary revenue driver. Replacing 85% of total income with earnings from the hydro power project presents execution risk and uncertainty regarding future revenue stability. Additionally, the sale remains subject to final approval from secured creditors and lenders.
What to track next
Shareholders should monitor the results of the e-voting process, due on November 30, 2026. Key milestones to follow include the identification of a buyer and the final realization value of the assets compared to the current book value of Rs 44.26 crore.