Textile Stock in Focus After Plans to Raise ₹42 Cr via Rights Issue

Synopsis: Textile stock gains focus after announcing Rs 42.73 crore rights issue at Rs 5 per share, aimed at funding expansion, strengthening the balance sheet, and supporting growth.

The share of this company, which is engaged in diverse sectors including textile fabric trading, land trading, and hospitality, came into focus today after it announced a rights issue.

With a market capitalization of Rs 113 crore, Gujarat Cotex Ltd’s shares on Thursday made a day high of Rs 11.49 per share, up by 1.6 percent from its previous day’s close price of Rs 11.31 per share. The share of the company has given a return of 1,376.62 percent in the last five years.

What happened

Gujarat Cotex Ltd has launched a rights issue to raise Rs 42.73 crore to support expansion across its diversified businesses. The issue, priced at Rs 5 per share, opened on April 10 and will close on May 8, 2026, offering shareholders a chance to increase their stake.

The issue consists of over 8.54 crore equity shares on a 6:1 entitlement basis(meaning that for every 1 share an investor holds, they are eligible to apply for 6 additional shares in the rights issue). With the stock trading around Rs 11.2, the discounted pricing may attract participation, while proceeds are expected to strengthen the balance sheet and fund future growth plans.

Objective of Issue: Out of the total Rs 42.73 crore to be raised, the company plans to use Rs 9.60 crore to complete its premium hotel project near Sarangpur Hanuman Mandir. The project will include 55 rooms and 10 dormitory units, targeting the rising demand for hospitality services in the area.

Additionally, Rs 2.13 crore will be used to purchase a new registered office, while Rs 19.30 crore is allocated for working capital to support business growth. The remaining Rs 10.68 crore will be used for general corporate purposes, improving overall flexibility and operations.

About the Company

Gujarat Cotex Limited, formerly known as Octagon Industries Ltd, is a Surat-based company incorporated in 1992. It operates across multiple segments including textile fabric trading, land trading, and hospitality, reflecting a diversified business model built over the years.

Since 2007–08, the company has expanded into real estate and is now entering hospitality with a new project. It has also recently forayed into agro-commodity trading, focusing on packed pulses, while aiming for growth through quality, innovation, and sustainable practices.

Financial Highlights: The revenue from operations grew by 9.46 percent to Rs 7.63 crore in Q3 FY26, corresponding to the same quarter in the last financial year, and the operating margin fell to a negative of 1.31 percent from positive 1.87 percent last year. Accompanied by a net profit decline of 58 percent to Rs 0.05 crore in Q3 FY26 from Rs 0.12 crore in Q3 FY25, resulting in an EPS of Rs 0.01 per share in Q3 FY26.

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