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Informist, Tuesday, Jul. 21, 2026

 

--NCLT Oks Siyaram Silk preference shrs issue to shrholders through reserves

 

By Surya Tripathi

 

NEW DELHI – The Mumbai bench of the National Company Law Tribunal Tuesday approved Siyaram Silk Mills Ltd.'s move to issue preference shares by way of bonus to equity shareholders of the company utilising its general reserves. The petition filed by Siyaram Silk is allowed and the scheme of arrangement between Siyaram Silk and its shareholders is made absolute, said the tribunal. 

 

According to the scheme, four preference shares - series I of face value of INR 10 each fully paid up will be issued to shareholders for every one equity share of INR 2 each fully paid up held by the latter. Further, three preference shares - series II of face value of INR 10 each fully paid up will be issued to shareholders for every one equity share of INR 2 each fully paid up held by the latter, it said.

 

The scheme said that over the years, Siyaram Silk has built up substantial surplus reserves from its profits. The surplus reserves are well above the company's current and likely future business needs, it said. Further, upon taking into consideration the surplus reserves being more than what is needed to fund Siyaram Silk's future growth and the company's capability to generate strong free cash flow in the foreseeable future, it is of the view that these excess funds can be optimally utilised to reward its shareholders, said the scheme.

 

Even after the issue of preference shares in accordance with the scheme, Siyaram Silk would continue to have sufficient cash resources to discharge its liabilities towards its lenders and other stakeholders on time and in the ordinary course of its business, said the scheme. Therefore, the company has proposed to distribute such surplus funds amongst its shareholders by issuing fully paid up preference shares by way of bonus, it said. The preference shares will be a listed security and will give flexibility to Siyaram Silk and its equity shareholders in managing its liquidity until redemption, it added.

 

Siyaram Silk is engaged in the business of manufacturing, branding and marketing of fabrics, readymade garments and indigo dyed yarn. The authorised share capital of Siyaram Silk is INR 120 million. The issued, subscribed, and paid-up share capital of the company is INR 90.74 million.

 

At 1118 IST, the shares of Siyaram Silk Mills were trading 1.3% lower at INR 636.30 on the National Stock Exchange.  End  

 

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

 

Edited by Deepshikha Bhardwaj

 

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