Vellinakshatram is set in the backdrop of Jagadish Mills in Alappuzha, owned by a retired Judge. The manager of the mill frames the other partner under false charges and he is sent to jail. The falsely accused man loses his sanity in prison. The Judge realizes his mistake, and decides to adopt Santha, the daughter of his partner. Santha grows up under the impression that the Judge is her father.
Santha falls in love with Mohan, a clerk in the mill. The nefarious manager schemes to acquire the mill by marrying his son Anathan to Santha. He harasses Mohan and forces him out of work. Unbeknownst to him, his own daughter Leela is also in love with Mohan. The workers unite against the manager and demand Mohan’s reinstatement. Mohan is finally given his job back, and the manager’s plots are revealed. Santha comes to know of the injustice faced by her father. Ultimately, the misunderstandings are resolved and Santha marries Mohan.
The first film made by the iconic Udaya Studio in Alappuzha, the film was unfortunately not a hit at the box office. It is still regarded as an important film, responsible for introducing artists like Miss Kumari, the musician B.A. Chidambratanath, the editor K.D. George and lyricist Abhyadev, all of whom had a wide influence on Malayalam cinema in the coming decade.