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Awaiting price reaction for this filing.
Union Bank of India has issued a 15-day notice for e-auction of Kallam Textiles' Spinning Unit at Chowdavaram, Guntur, under the SARFAESI Act, 2002, to recover outstanding dues of Rs. 208.78 crore as of 31 December 2025. The bank had issued a demand notice in September 2024 and took constructive possession of the secured assets in December 2024 after the company failed to repay. The e-auction is scheduled for 30 March 2026 with a combined reserve price of Rs. 103.50 crore — Rs. 51 crore for land and buildings, and Rs. 52.50 crore for plant and machinery. The company has filed a case (SA No. 51/2025) at DRT Visakhapatnam, which may affect the sale proceedings. The company's Managing Director and Joint Managing Director are personal guarantors to the loan.
This is a deeply negative signal pointing to severe financial distress — a secured lender is seizing and auctioning a core operating asset. The reserve price covers only about half the bank's total dues, indicating a possible shortfall and further losses. Shareholders should brace for significant equity value erosion and continued stock price weakness; the outcome of the DRT case will be critical to watch.