Penny Stock Under Rs 20: Gujarat-Based Textile Manufacturer Plans Rs 42.73 Crore Rights Issue to Expand Across Multiple Businesses

The Indian equity markets are trading in the green on Monday, with the Nifty 50 at 24,017.25, up 119.30 points or 0.50 per cent. Broader markets are also witnessing buying interest, with the Nifty Smallcap 250 index rising 200.35 points or 1.22 per cent to 16,615.00. Amid positive broader market sentiment, Gujarat Cotex was trading at Rs 11.25, up Rs 0.07 or 0.63 per cent during the session, following a recent fundraising announcement by the company.

Gujarat Cotex Rights Issue Update

Gujarat Cotex has announced plans to raise Rs 42.73 crore through a Rights Issue to support its expansion plans and strengthen its financial position. The Rights Issue opened on April 10, 2026 and will close on May 8, 2026, while the last date for on-market renunciation of Rights Entitlements is May 5, 2026.

The issue is priced at Rs 5 per share and comprises 8,54,64,000 fully paid-up equity shares, offered in the entitlement ratio of 6:1, meaning shareholders are eligible to receive six rights shares for every one share held.

Gujarat Cotex Fund Utilisation Plan

Out of the total proceeds, the company plans to utilise Rs 9.60 crore for completion of its upcoming premium hotel project near Sarangpur Hanuman Mandir. A further Rs 19.30 crore has been earmarked for working capital requirements, while Rs 2.13 crore will be used for purchase of a new registered office. The remaining Rs 10.68 crore will be allocated towards general corporate purposes and business expansion.

Gujarat Cotex Financial Performance

For the nine months ended December 2025, Gujarat Cotex reported revenue from operations of Rs 29.86 crore, registering a growth of 54.7 per cent YoY compared to Rs 19.30 crore in the corresponding period last year. Net profit rose to Rs 0.83 crore, up 79.7 per cent YoY from Rs 0.46 crore reported in 9MFY25.

About Gujarat Cotex

Founded in 1992 as a textile manufacturing company, Gujarat Cotex initially focused on polyester fabrics and later transitioned into textile trading. Over the years, the company has diversified its business model to reduce dependence on a single segment.

The company now operates across textiles, Real Estate, hospitality, and agro commodity trading. It is also entering the hospitality segment through its premium hotel project, while expanding its agro commodity business with a focus on packed pulses and institutional buyers.

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