Now Reading: Axita Cotton penny stock in focus on insolvency move
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Axita Cotton penny stock in focus on insolvency move
Axita Cotton share price will be in focus on Monday after the company submitted an Expression of Interest to participate in the Corporate Insolvency Resolution Process (CIRP) of Varidhi Cotspin Private Limited.…
Axita Cotton share price will be in focus on Monday after the company submitted an Expression of Interest to participate in the Corporate Insolvency Resolution Process (CIRP) of Varidhi Cotspin Private Limited. The stock, a penny stock under Rs 10, closed 5% higher at Rs 7.68 on Friday, with an intraday high of Rs 7.90 and low of Rs 7.30.
Varidhi Cotspin is a cotton yarn manufacturer in Dholka, Ahmedabad, with a spinning capacity of 29,184 spindles and annual production of about 4,442 metric tonnes. Axita Cotton said acquiring Varidhi through the IBC process would complement its operations and support its long-term business expansion strategy in the cotton value chain.
The stock has gained 5.35% in the past week and 3.5% in a month but has fallen 19% in six months and 32% year-to-date. Over three years, it has lost 42%, though it has delivered multibagger returns of 269% in five years.
Indian Opinion Analysis
This is a speculative play on a distressed asset, not a sure turnaround. Axita Cotton, with a market cap under Rs 50 crore, is bidding for a company that has already failed. The IBC process is adversarial and creditors often take a deep haircut. A small player acquiring another through CIRP carries execution risk: integration, funding, and regulatory approvals. Watch for the resolution professional's decision and any competing bids, which could push up the cost or derail the deal.
Source: livemint.com
This story was synthesised by AI from the source linked above.
