**Current Status: Under Corporate Insolvency Resolution Process (CIRP)** Winsome Yarns Limited is an Indian textile manufacturer currently undergoing a fundamental structural and operational transformation. Following a period of severe financial distress, the company was admitted into the **Corporate Insolvency Resolution Process (CIRP)** by the **National Company Law Tribunal (NCLT), Chandigarh Bench**, on **December 22, 2023**. The company is presently transitioning from a state of diminished capacity to a proposed revival under new management. --- ### Strategic Turnaround & New Ownership Framework The company is at a critical inflection point following the approval of a **Resolution Plan** by the **Committee of Creditors (CoC)** with a **93.93%** majority. * **Incoming Management:** The resolution plan was submitted by **Mohini Health & Hygiene Limited**, an established manufacturer and exporter of medical consumables. * **Resolution Value:** The total resolution amount is pegged at **INR 162.9 Crores**, which includes CIRP costs. * **Capital Infusion:** A new debt sanction of **INR 154 Crores** from **Union Bank of India** has been structured to fund the revival. * **Performance Guarantee:** The resolution applicant has already deposited **INR 20.20 Crores** as performance security. * **Legal Vesting:** Upon final NCLT sanction, all **pre-CIRP liabilities** (crystallized or uncrystallized) will be extinguished, and all existing **encumbrances, security, and liens** on company assets will be released, providing the new management with a clean balance sheet. --- ### Core Manufacturing Infrastructure & Capacity The company’s physical infrastructure is centered in Punjab, though current utilization is minimal, intended primarily to maintain "Going Concern" status during the insolvency proceedings. | Facility | Location | Primary Activity | Infrastructure Detail | Current Operational Status | | :--- | :--- | :--- | :--- | :--- | | **Plant-I** | Mohali, Punjab | Knitwear & Garments | **182 machines**; **120,000 pcs/month** capacity | Operating at **~5,000 pcs/month** | | **Plant-II** | Derabassi, Punjab | Yarn Production | Spinning infrastructure | Limited/Job-work basis | **Operational Shift:** Due to a total absence of fresh independent orders and working capital, the business model has shifted to a **job-work basis** for third parties. This allows the company to recover variable costs and a portion of fixed costs without taking on raw material price risk. --- ### Product Portfolio & Market Verticals The company’s product range spans traditional textiles to high-growth medical hygiene products, aligning with the expertise of the incoming resolution applicant. * **Surgical & Absorbent Cotton:** Includes Absorbent Cotton Wool, Surgical Cotton, and Bleached Cotton. * **Personal Hygiene & Retail:** Cotton Ear Buds, Cotton Balls, and Makeup Pads. * **Medical Protective Gear:** Production of **N95 Masks**, **Surgical Masks**, and other medical consumables. * **Textile Staples:** High-quality yarn and knitwear for domestic and international export markets. --- ### Captive Power & Energy Vertical To mitigate high energy costs—a significant headwind in the Punjab textile sector—the company operates a captive power generation network. | Site Name | Location (Punjab) | Installed Capacity | | :--- | :--- | :--- | | **Barewal** | Sidhwan Canal | **900 KW** | | **Isewal** | Sidhwan Canal | **900 KW** | | **Raowal** | Sidhwan Canal | **850 KW** | | **Bharowal** | Sidhwan Canal | **750 KW** | | **Mansian** | Sidhwan Canal | **500 KW** | **Total Capacity:** **3.90 MW** via **five mini hydro power projects**. The power generated is adjusted directly against the electricity bills of the **Derabassi plant**, providing a structural cost advantage. --- ### Financial Profile & Debt Restructuring The company’s historical financials reflect deep distress, which the CIRP aims to resolve. **Key Financial Indicators (Historical):** * **Net Worth:** **Negative INR 408.97 Crore** (as of FY 2022-23). * **Debt Assignment:** In FY 2015-16, **INR 470.71 Crore** of debt was assigned to **Edelweiss Asset Reconstruction Company (EARC)**. * **Un-provided Interest:** The company has not accounted for interest on borrowings for several years. As of March 31, 2025, the aggregate un-provided interest is estimated at **INR 1,532.85 Crore**. **Post-Resolution Capital Structure (Projected):** * **Equity Restructuring:** Existing equity of **7,07,07,229 shares** will be restructured. Post-implementation, the Equity Share Capital is projected at **INR 2,63,15,790**. * **Change of Control:** Fresh equity will be allotted to **Mohini Health & Hygiene Limited** (or its SPV), resulting in a complete change of promoter control. --- ### Risk Factors & Audit Qualifications Investors must note significant risks associated with the ongoing insolvency and historical operations: * **Judicial Risk:** The resolution plan is pending final approval from the **Hon'ble NCLT**. If rejected, the company will face **mandatory liquidation**. * **Audit Qualifications:** Auditors have issued a **Qualified Opinion** regarding the "Going Concern" assumption and have noted non-compliance with **Ind AS-21** and **Ind AS-109** regarding the valuation of a **USD 4.82 Million** investment in the **Arise Money Market Fund**. * **Litigation:** The Resolution Professional (RP) has filed applications under **Sections 43, 45, and 66** of the IBC to reverse potentially fraudulent or preferential transactions. * **Operational Hurdles:** The company faces high **Reverse Logistics** costs in its e-commerce segments and a "Wilful Defaulter" tag in CIBIL reports (pre-dating the resolution plan). * **Macro Risks:** Cotton prices account for **65%** of production costs; volatility in raw material prices remains a primary threat to margins. --- ### Growth Catalysts & Macro Opportunities The revival strategy seeks to capitalize on several industry tailwinds: * **China Plus One:** Global supply chain diversification favoring Indian textile exporters. * **Government Support:** Benefits from the **National Technical Textiles Mission (NTTM)** and the **RoSCTL scheme** (extended through **March 2026**). * **FDI & Capacity Building:** Leveraging **100% FDI** allowances and the **SAMARTH** scheme for workforce training. * **Sector Expansion:** Transitioning toward high-margin **Technical Textiles** and integrated e-commerce fulfillment.