Stock of this textile company has zoomed over 1100% in 10 weeks

Shares of Digjam were locked in the upper circuit for the eighth straight trading day, up 5 per cent at Rs 224.50 on the BSE in Wednesday’s trade. Of 50 trading days, the stock of the textile company has been frozen in the upper circuit of 5 per cent for 49 days on the BSE, since it got relisted on October 18, 2021 after a reduction of capital. In the past 10 weeks, the market price of Digjam has appreciated by 1,138 per cent or 13 times from Rs 17.27.

Till 02:42 pm; a combined 3,005 equity shares had changed hands and there were pending buy orders for 98,356 shares on the NSE and BSE.

As per the Resolution Plan approved by Hon’ble NCLT, 27.53 million equity shares held by the erstwhile promoters (entire shareholding) were cancelled and reduced to zero and balance 60.11 million equity shares of Rs 10 each held by public were written down by about 96.67 per cent through cancellation of 58.11 million equity shares (2 million equity shares of Rs 10 each were issued in lieu of 60.11 million equity shares).

The issued, subscribed and paid-up equity capital of the company reduced from Rs 87.64 crore consisting of 87.64 million equity shares of face value of Rs 10 each to Rs 2 crore consisting of 20 million equity shares of Rs 10 each.

Digjam operates in woollen worsted textiles segment and operates a fully equipped composite mill in Jamnagar, Gujarat. The woollen worsted industry in the country comprises of a few mills in the organized sector and a number of units in the unorganized sector.

The management believes that the company’s business is backed by necessary skills and expertise and remains cautiously optimistic that the performance will improve as the Resolution Plan has been approved now, with continuing momentum of operational improvements and expected upturn in economic conditions, helping domestic as well as export demand.

Competitive advantage, robust demand, favourable government policies, increasing investments and urbanisation are expected to be the key drivers for revival of the industry, the management said in FY 21 annual report.