Aarvee Denims and Exports Limited (BSE: 514274, NSE: AARVEEDEN) has announced its unaudited financial results for the quarter and nine months ended December 31, 2024, alongside a preferential equity issue worth ₹49.99 crore. The financial results were reviewed and approved by the Board of Directors at its meeting held on January 30, 2025.
Key Financial Highlights (Standalone)
Particulars
Q3 FY2025 (₹ Cr)
Q3 FY2024 (₹ Cr)
YoY Change (%)
9M FY2025 (₹ Cr)
9M FY2024 (₹ Cr)
YoY Change (%)
Revenue from Operations
62.52
83.65
-25.2%
187.14
244.50
-23.5%
Total Income
63.85
84.65
-24.6%
190.26
247.80
-23.2%
Total Expenses
64.23
85.14
-24.6%
191.90
250.40
-23.3%
EBITDA
(0.38)
(0.49)
-
(1.64)
(2.60)
-
Net Profit / (Loss)
(2.65)
(2.92)
9.2%
(8.05)
(10.46)
23.0%
Revenue Decline: The company witnessed a 25.2% YoY decline in quarterly revenue and a 23.5% drop over the nine-month period due to weak demand in both domestic and international denim markets.
Net Loss Narrows: Despite a revenue decline, the company reported a 9.2% reduction in quarterly net lossand a 23.0% reduction in the nine-month loss due to cost optimization measures.
Inventory Valuation Impact: A write-down of inventory valuation worth ₹14.65 crore was recorded, reducing closing stock value to ₹50.39 crore.
Preferential Equity Issue Worth ₹50 Crore
The Board approved the issuance and allotment of 37,13,044 equity shares at a price of ₹134.66 per share (including a premium of ₹124.66), aggregating to ₹49.99 crore. This preferential allotment will be made to 41 public investors.
Major Allottees:
Investor
No. of Shares
Investment (₹ Cr)
Yashwant Amratlal Thakkar
5,19,828
7.00
Varun Kabra
2,22,783
3.00
Sandeep Singh
1,85,653
2.50
Vpk Global Ventures Fund Scheme I
1,70,800
2.30
Komalay Investrade Pvt Ltd
1,48,522
2.00
Total (41 Allottees)
37,13,044
49.99
EGM for Approval: The company has scheduled an Extraordinary General Meeting (EGM) on March 1, 2025, to seek shareholder approval for the preferential issue.
Use of Proceeds: Funds raised will be utilized for working capital requirements and debt reduction.
Corporate Announcements
Share Purchase Agreement (SPA) Execution:
The promoters sold their entire 60.81% stake (1.42 crore shares) for ₹35.82 crore to a new investor group led by Jaimin Kailash Gupta.
As part of the transition, the Narol unit will remain operational under the new management.
Debt Restructuring & Interest Waivers:
The company obtained consent from depositors and lenders to waive interest on fixed deposits and unsecured loans from October 2024 to March 2025 due to financial stress.
Appointment of Scrutinizer:
Mr. Tapan Shah, a practicing company secretary, has been appointed as the scrutinizer for the preferential issue process.
Management Commentary
Vinod P. Arora, Chairman & Managing Director, stated: "The financial performance remains impacted by subdued demand in the denim industry. However, our cost rationalization measures have helped us reduce net losses. The preferential equity issuance and promoter stake sale mark a significant shift in the company’s trajectory, positioning us for long-term growth."
Outlook & Conclusion
The company remains under financial stress but has taken significant steps toward restructuring.
The infusion of ₹50 crore via preferential issue and the change in management are expected to bring stability.
Investors will closely monitor the company’s ability to leverage fresh capital to improve operational efficiency.
Stock Market Reaction
Shares of Aarvee Denims and Exports Ltd. will likely react to the preferential allotment pricing and strategic changes in ownership.
Market sentiment may depend on revival in denim demand and execution of financial restructuring plans.