Kallam Textiles Limited (formerly **Kallam Spinning Mills Limited**) is a vertically integrated textile manufacturer headquartered in **Guntur, Andhra Pradesh**. The company operates across the entire textile value chain—from cotton ginning and spinning to weaving and dyeing—supported by captive renewable energy assets. Currently, the company is undergoing a significant structural and financial transition, including a **Corporate Insolvency Resolution Process (CIRP)** and a shift toward a **job-work-based operational model**. --- ### **Integrated Manufacturing Infrastructure & Capacities** The company’s operations are concentrated in the cotton-rich belts of Andhra Pradesh and Telangana, organized into four primary industrial divisions: | Division | Location | Infrastructure & Monthly Capacity | | :--- | :--- | :--- | | **Ginning** | Chowdavaram, Guntur | **28** modern rollers; capacity to press **6,000 bales** per month (**72,000 bales/annum**). | | **Spinning** | Chowdavaram, Guntur | **59,280** ring spindles (**34,416** compact) and **2,912** rotors. Production: **420 tons** (Ring) and **500 tons** (Open End). | | **Weaving** | Kunkupadu, Bapatla | **248** high-speed looms; includes direct and sectional warping (sizing) capabilities. | | **Dyeing** | Kunkupadu, Bapatla | Processing capacity of **3,000 kgs** per day. | **Strategic Sourcing:** Located in **Guntur**, a major hub for **MCU5 long-staple cotton**, the company sources raw material directly from farmers. It historically maintains a **5-6 month** stock (built up in **November**) to ensure consistent quality throughout the year. --- ### **Product Portfolio & Market Specialization** Kallam Textiles produces a range of standardized and customized textile products, with an increasing focus on sustainable and high-value grades. * **Cotton Yarn:** * **Ring Spun Combed Yarn:** Ranging from **Ne.30s to Ne.80s** (Combed warp/Compact). * **Open End (OE) Yarn:** Ranging from **Ne10s to Ne20s**. * **Specialized Yarns:** Includes **TFO** (Two-for-One) Ring Spun, **TFO** Open End, and **BCI (Better Cotton Initiative) Certified** Yarn for sustainable fashion. * **Woven Fabrics:** * **Yarn Dyed Shirting:** 100% Cotton and various blended products. * **Bottom Weight Fabric:** Heavy-duty fabrics designed for trousers and industrial apparel. **Revenue Mix:** Sales are primarily domestic, focused on **South and Western India**. Exports historically contribute **<20%** of revenue, primarily serving markets in **Bangladesh** and **China**. --- ### **Energy Portfolio & Asset Monetization Strategy** To combat rising power costs, the company developed a captive power portfolio. However, due to regulatory changes and liquidity needs, this segment is currently being restructured. * **Solar Power (Captive):** Currently operating **3.0 MW AC** (**2.0 MW** at Guntur and **1.0 MW** at Addanki). Expansion plans aim for a total of **4.6 MW AC** to offset industrial consumption. * **Hydel Power Divestment:** The company is liquidating its **4.0 MW** Hydel capacity (three plants on the **Nagarjuna Sagar Project** canals). Following the state bifurcation, these Telangana-based plants became ineligible for captive use in Andhra Pradesh, leading to the decision to sell. * **Subsidiary Liquidation:** The Board has approved the sale of investments in **Espar Pack Pvt Ltd** (**7,15,000 shares**) and **Shivani Power Spinners Pvt Ltd** (**3,18,305 shares**) to generate immediate liquidity. --- ### **Financial Performance & Debt Profile** The company has faced severe financial headwinds over the last three fiscal years, characterized by declining turnover and widening losses. | Metric (₹ in Crore) | FY 2024-25 | FY 2023-24 | FY 2022-23 | | :--- | :---: | :---: | :---: | | **Total Turnover** | **256.70** | **368.47** | **414.19** | | **Net Profit / (Loss)** | **(47.36)** | **(37.44)** | **(21.29)** | | **Total Outstanding Debt** | **280.49** | **-** | **-** | **NPA Classification & Recovery:** * **Default Status:** Loan accounts were classified as **Non-Performing Assets (NPA)** on **January 10, 2024**, following defaults starting in late 2023. * **Debt Reclassification:** Under **Ind AS-1**, all non-current borrowings have been reclassified as **Current Liabilities** as they are now repayable on demand. * **SARFAESI Actions:** Lenders led by **Union Bank of India** and **Indian Bank** have initiated asset seizures. E-auctions have been scheduled for land, buildings, and machinery with reserve prices totaling over **₹103 crore**. --- ### **Insolvency Proceedings & Operational Restructuring** As of **April 6, 2026**, Kallam Textiles is under the **Corporate Insolvency Resolution Process (CIRP)**. * **NCLT Intervention:** The **National Company Law Tribunal (NCLT)**, Amaravati Bench, admitted a Section 7 petition for a default of **₹210.49 crore**. * **Suspension of Board:** An **Interim Resolution Professional (IRP)**, Mr. Chillale Rajesh, has been appointed to oversee the company; the Board’s powers are currently suspended. * **Shift to Job Work:** To manage extreme **working capital strain** and maintain plant utilization, the company has transitioned its manufacturing units to a **job work basis**, providing manufacturing services to third parties rather than sourcing its own raw materials. --- ### **Critical Risk Factors** Investors should note the following systemic and company-specific risks: * **Legal & Insolvency Risk:** The company faces simultaneous proceedings in the **NCLT**, **Debt Recovery Tribunal (DRT)**, and various High Courts. There is "Material Uncertainty" regarding its status as a **Going Concern**. * **Liquidity & Working Capital:** The textile business is highly seasonal. The company’s inability to secure bank support for Letters of Credit (LCs) has severely hampered its ability to purchase raw cotton. * **Operational Pressures:** Capacity utilization has dropped significantly (below **75%** for spinning). High fixed overheads are exacerbated by **FPPCA (Fuel and Power Purchase Cost Adjustment)** charges totaling **₹7.58 crore**. * **Macroeconomic Volatility:** Indian cotton prices have recently trended **10-15%** above international benchmarks. Furthermore, the company does **not hedge** its foreign currency receipts, leaving it exposed to forex fluctuations. * **Regulatory & Subsidy Delays:** Significant capital remains locked in long-pending **Government power and TUF subsidies**, some dating back to **FY19**.