Ashima spurts on land sale

Ashima Ltd rose 6% in the early morning trades today at Rs.24.10 and continues to remain intact in the green zone. Its 52-week high and low stands at Rs.27.10 and Rs.12.50 respectively.

This Gujarat based company is engaged in the business of cotton fabrics.

Earlier this month, at the AGM, the company had announced it plans to mobilise resources from internal sources by disposing off the assets such as plant & machinery, utilities and land, which were not required for company's textile operations. The proceeds were intended to be utilized for revamping and modernizing textile operations, meeting requirements of working capital and repayment of other secured debts. It was also stated that the amounts proposed to be realized from sale of said assets over a period of about 3 years, would be approximately Rs. 150 crore.

The company informed the exchanges yesterday evening after market closure that it has finalised the sale of surplus land, not required for Textile operations, admeasuring to 49125.40 sq. meters at an aggregate consideration of Rs.161 crore.

Out of the aforesaid consideration, the Company expects to receive about Rs.100 crores by March 31, 2018. The rest of funds will be realized by March 31, 2019.

Financially the company is on a weak wicket – it ended Q1FY18 with a net loss at Rs.6 crore, up from loss of Rs.4 crore in previous Q1. More than debt, it is the high raw material cost, total operating expenses and muted growth in revenue which is pushing the company into the red.