As per mythological history Padmashalis are the progeny of Rishis. Padmashalis spread over throughout India and are in great numbers in South India. The handloom weaving had been their traditional occupation.
Padmashali Vamsam had its roots from Lord Sriman Narayana and it indicates that Lord Brahma emerged from the navel of Lord Sriman Narayana. Brughu Maharishi is considered as one of the Manasaputras (born by a wish) of Lord Brahma (It is also said that Brughu Maharishi was born from the heart of Lord Brahma). Down the lineage - Brughu Maharishi and his wife Kyathi had children – Bhargavi, Dhata and Vidhata. Bhargavi or Lakshimi Devi is Lord Vishnumurthy’s wife. Dhatha married to Ayathi and blessed with son, Praanudu. Vidhatha was married to Niyathi had a son – Mrukanda Maharishi. Mrukanda Maharishi and his wife Marudhvathi were blessed with son Markandeya Maharishi. The Markandeya Maharishi was bestowed with a son Bhavanarayana from Yagnakunda, otherwise known as Bhavana Rishi or Veda Shirsha. Bhavana Rishi and his wife Bhadravathi had 100 Padmashali sons. Padmashalis are the decendents of these 100 sons and they are spread all over India and other parts of the the World.
Markandeya Maharishi is an immortal incarnation. Lord Shiva protected Markandeya at the age of 16, from the clutches of death(Lord Yama), and blessed him immortality.
The word Padmashali has a very deep meaning in Hindu mythology. The Vaishnava group interpret in essence the word Padmashali is a conflation of two words, padma and shali. The word "Padma" is sahasradala padma, meaning the highest order of human intelligence. In body chakras "Padma" refers to sahasrara. The word "Shali" in Sanskrit is 'be holder'. Thus "Padmashali" literally means holder of sahasrara. In physical term it means intelligence. It is believed that Padmavathi of Mangapura/tiruchanur of Tirupati, the shasanam of the temple, declares that Padmavathi, as daughter of Padmashalis. Hence, the name Padmashali. Another aspect of Padmashali, Padma also refers to Lotus. The Lotus also refers to the intelligence or awakening of sahasrara. The word padma also means lotus thread.
The Shaiva group has a different interpretation that in order to clothe the nakedness of people in the world, Siva commissioned Markandeya Maharishi to perform a sacrifice and Bhavana Rishi, arose from homa kund, holding a lotus flower Padma in his hand. He had two wives, Prasannavati and Bhadravathi, daughters of Surya (The Sun) and Chayadevi. who had a hundred sons. The homa was conducted by Markandeya Rishi for loka kalyana at the instance of Srimmanaarayana (Vishnu). Bhavana Rishi was commanded by Srimannarayana to weave cloth from the lotus stem given from his navel. Bhavana Rishi took up the task and weaved a cloth and gave to Srimanarayana. Narayana pleased with the lotus cloth blessed him that his progenitors of the One hundred Gotras be known as PADMASHALIs.
The Padmashalis thus basically perform Brahmin rites and even today a group who are qualified agama shastra pandits perform the poojas and vedic rites. They are identified as "Padma Brahmins" and the origin of Padmashalis relates to Brighu Maharishi and Brighu Marharshi gave astrology to the world. Further down in the order of heritage Markandeya who wrote the epic on Devi and her shakti, famously known as Sri Devi Bhagavatham. It also means that Padmashalis are shakti aradhakas.
They profess to have been following all the religious rites prescribed for Brahmans till in the beginning of the Kali age. One of their caste named Padma-saka declined to reveal the virtues of a miraculous gem which Brahma had given to their caste to Ganapathi who sought to learn the secret which they had been enjoined to keep, and who on his wish not being gratified cursed them to fall from their high status. It is said however that one Parabrahmamurti born is Srirama Agrahara pleased Ganapathi by his tapas, and got the curse removed, so that after 5000 years of the Kali-Yuga, they should regain their last position. This Parabrahmamurti other wise known as Padmabavacharya, it is said redistributed the caste into Ninety-Six gotras arranged in eight groups and established four Mathas with gurus for them.
Thus, Padmashali name as caste carries highest meaning that it is caste of Brahminical not by birth but by deeds. Like Brahminical class, the Padmashalis relate their origin to Rishis, sages as gothras. Most of the Padmashalis except Pattusalis of Srikakulam are non-vegetarians. Padmashalis either do business or get employed or do their traditional occupation-weaving and they don't do chapliance. Padmashali is a backward community, while Brahmins are socially advanced. Padmashalis follow a mix of Dravidian and Aryan rituals / food habits, suggesting Aryan origin and intermixture with the Dravidians.
The Padmashalis developed exclusively cloth-weaving skills. Padmashali women assist the men in hand weaving. By the time the British arrived, the Padmashalis were producing fine quality handloom woven huge quantities of cloth and controlled a leading cottage industry of India.