Blue Pearl Texspin Limited was formerly known as E-Wha Foam India Limited. It started off with the setting up a unit in Goa to produce 1,500TPA (tonnes per annum) of polyethylene foam products in collaboration with E- Wha Foam Korea Co (South Korea). In 2012, it changed its name to Blue Pearl Texspin Limited and started a textiles business completely different from the earlier business of manufacturing foam and foam-based products. As per Watchoutinvestor.com, E-Wha Foam India ran into various issues with the authorities. In 2005, the Bombay Stock Exchange (BSE) charged the company for not being traceable at its last known address. In 2006, it did not comply with listing agreement and the BSE gave it a notice for delisting. In 2007, the stock was suspended from trading. The suspension was later revoked. In 2011, it did not submit its shareholding pattern to the BSE for the September 2011 quarter and the corporate governance report for the March 2012 quarter. In 2016, it reduced its equity share capital from Rs5.12 crore to Rs25.60 lakh and cancelled equity share capital amounting to Rs4.86 crore which was utilised to write off the debit balance in the profit and loss account.
Blue Pearl also has had frequent changes in directors. In 2014, four directors—Nijal Navinchandra Shah, Narendra C Solanki, Deepak Rane and Shankar Pandare—resigned. The promoter shareholding is also only 21.62%. The company has seen no growth over more than 14 quarters. The average sales of the past 14 quarters were Rs5 lakh and not exceeded Rs6 lakh in these past 14 quarters. The sales for the June 2017 quarter were Rs6 lakh. In these 14 quarters, the company has made no profit. It has made a marginal loss in 4 out of the 14 quarters. In the June 2017 quarter, operating profit margin was -16.67% and the margin for FY15-16 was -5.56%. Despite such a dismal performance and compliance issues, the price of the stock rose 908% from Rs2 on 3 August 2016 to Rs20.15 on 5 September 2017. Something is clearly fishy and the regulatory authorities are fast asleep.