Pavna Industries Limited — financial distress indicators
Financial-health summary
Pavna Industries Limited's reported numbers place it in the 'Watch' financial-health band (distress score 36/100). The main indicators are market-implied default probability >20%, ohlson o-score signals likely failure and deep share-price drawdown. Independently, the Ohlson accounting model puts its 1-year failure probability at 59% and the market-implied (Merton) default probability is 22.2%. In its favour: high insider/promoter ownership (78%) aligns management with survival.
Stress by dimension
Share price — last 12 months
Indicators behind the score
Each red flag shows the evidence from the company’s own filings and the financial or legal principle behind it. Points add to the 0–100 score.
Merton distance-to-default 0.77 σ → PD 22%.
Structural (Merton/KMV) model: equity is a call option on assets; low distance-to-default means assets are close to the default point.
O-score 0.35 → model probability 59%.
Ohlson (1980) logit model of 1-year corporate failure; O > 0 (p > 50%) is the original failure cut-off.
Price is -62% from its 52-week high.
For financial firms a share-price run often precedes a deposit or funding run (confidence channel).
Revenue declined every year for three years.
Structural, not cyclical, decline.
Revenue vs net income
Cash generation
Debt vs cash vs equity
✅ Mitigating factors
- High insider/promoter ownership (78%) aligns management with survival.
📰 Recent news scan
- Pavna Industries Ltd. Share Price Today: 10.67% Increase - UnivestGoogle News · 2026-08-06
- Pavna Industries Ltd. Share Price Today: 8.82% Increase - UnivestGoogle News · 2026-07-28
⚖️ Indian legal pathway — the IBC, 2016
How insolvency starts
- A financial creditor (§7), an operational creditor after a demand notice (§§8–9) or the company itself (§10) can apply to the NCLT once a default of at least ₹1 crore occurs (§4).
- On admission a moratorium (§14) stops suits and recovery; the board is suspended and an insolvency professional runs the company.
- The Committee of Creditors approves a resolution plan with 66% of voting share (§30(4)) within an outer limit of 330 days (§12); otherwise liquidation (§33) under the §53 waterfall — equity ranks last. Defaulting promoters are generally barred from bidding (§29A).
Earlier warning stages
- RBI's Prudential Framework for Resolution of Stressed Assets (7 June 2019): lenders must review a borrower within 30 days of default and implement a resolution plan, or provide more.
- Listed companies must disclose loan defaults to exchanges under SEBI (LODR); a rating downgrade to “D” is a public signal.
- Auditors must report going-concern uncertainty (SA 570 / Ind AS 1).
Frequently asked questions
What do Pavna Industries Limited's financial-health indicators show?
As of 2026-10-09, Pavna Industries Limited's public financial data places it in the 'Watch' band with a distress score of 36/100, driven by market-implied default probability >20%, ohlson o-score signals likely failure and deep share-price drawdown. This is a statistical screen of reported numbers — it does not mean the company is insolvent, has defaulted or will enter insolvency proceedings.
What is Pavna Industries Limited's financial distress score?
36/100 ('Watch'). Ohlson O-score 0.35 (model 1-year failure probability 59%). Merton distance-to-default 0.77 σ (model default probability 22.2%).
What works in Pavna Industries Limited's favour?
High insider/promoter ownership (78%) aligns management with survival.
How are shareholders treated if a company enters insolvency?
Under the IBC the Committee of Creditors controls the resolution; the §53 waterfall pays secured creditors and workers first and equity last. In most resolution plans existing shareholders are wiped out or left with a token stake, and the company may be delisted.
Other Consumer Discretionary companies with distress indicators
- Balkrishna Paper Mills Limited (BALKRISHNA)Very weak 100/100
- CLC Industries Limited (CLCIND)Very weak 100/100
- Flexituff Ventures International Limited (FLEXITUFF)Very weak 100/100
- Praxis Home Retail Limited (PRAXIS)Very weak 100/100
- SEL Manufacturing Company Limited (SELMC)Very weak 100/100
- Spencer's Retail Limited (SPENCERS)Very weak 100/100
All Consumer Discretionary companies with distress indicators →
Methodology
Score = capped sum of rule-based red flags across seven dimensions (liquidity, solvency, profitability, cash flow, sales trend, market signal, news). Ohlson O-score (1980) gives an accounting-based 1-year failure probability; Merton distance-to-default (Bharath & Shumway 2008) gives a market-implied probability. Financial institutions use a capital-based rule set. Recalculated every trading day from the latest filings, prices and news.