Amba Auto seeks approval for ₹161.60 crore warrant issue

Amba Auto Sales and Services Limited is seeking shareholder approval to issue up to 1.60 crore convertible warrants at ₹101 each, which could raise ₹161.60 crore if fully subscribed and exercised. The board-approved proposal of November 2, 2026 assigns ₹64.65 crore, the largest allocation, to repayment or prepayment of loans.

How much is Amba Auto proposing to raise?

Amba Auto proposes to raise up to ₹161.60 crore through a preferential issue of 1.60 crore fully convertible equity warrants priced at ₹101 each. The board approved the proposal on November 2, 2026, subject to necessary approvals, and each warrant would convert into one equity share with a face value of ₹10.

The issue requires members to pass a special resolution under the Companies Act, 2013 and the Securities and Exchange Board of India’s Issue of Capital and Disclosure Requirements regulations. The relevant date for price determination is November 3, 2026, which the notice identifies as 30 days before the extraordinary general meeting scheduled for December 3, 2026.

The ₹101 issue price includes a premium of ₹91 over the ₹10 face value of an eventual equity share. Amba Auto says its shares, listed on NSE Emerge, the small and medium enterprise platform of the National Stock Exchange of India, were frequently traded for the applicable pricing provisions.

Where will Amba Auto use the ₹161.60 crore?

Amba Auto intends to use ₹64.65 crore for repayment or prepayment of secured and unsecured loans, making this the largest stated use of the proposed ₹161.60 crore proceeds. The notice says the loans may include borrowings from promoters, directors, related parties and other lenders, as well as accrued interest where applicable.

Working capital is the next-largest allocation at ₹40.75 crore for material procurement, inventory funding, supplier payments and other operational expenses. Amba Auto also proposes ₹16.20 crore of capital expenditure for new showrooms, workshops and warehouses, including civil and interior works, electrical installations, plumbing, flooring, signage, furniture, fixtures and equipment.

Amba Auto has allocated ₹40 crore to general corporate purposes, including contingencies and administrative and operational costs. This allocation is within the disclosed cap of up to 25% of issue proceeds, while undrawn proceeds are proposed to be held in cash-credit or fixed-deposit accounts with scheduled commercial banks.

What are the payment and conversion terms for Amba Auto warrants?

Amba Auto will receive 25% of the warrant price at subscription and allotment, while the remaining 75% becomes payable when holders exercise their warrants. On the maximum ₹161.60 crore issue, this means ₹40.40 crore would be payable upfront and ₹121.20 crore would depend on later exercise.

Holders may exercise warrants in one or more tranches within 18 months from allotment by providing written notice stating the number to be converted. If they do not exercise within 18 months, the warrants will lapse and the amount paid for those unexercised warrants will be forfeited by Amba Auto.

Amba Auto expects to use funds in phases within 24 months from each receipt, subject to business requirements and the availability of proceeds. Management says its funding estimates have not been appraised by a bank, financial institution or other external agency and could be revised for financial, market, sectoral, competitive, business, interest-rate or exchange-rate conditions.

How was Amba Auto’s warrant price determined?

Amba Auto set its warrant price at ₹101, which is ₹1 above the applicable floor price of ₹100. The company calculated a ₹99.35 price under the 10-trading-day volume-weighted average price method, compared with ₹97.66 under the 90-trading-day method, making the shorter-period measure ₹1.69 higher.

An independent registered valuer, Procurve Valux Private Limited, determined a value of ₹100 per equity share. Amba Auto obtained this valuation because the preferential issue would result in allotment exceeding 5% of its post-issue fully diluted share capital to an allottee or allottees acting in concert.

The ₹100 valuation became the applicable floor price because it exceeded the ₹99.35 figure produced by the 10-trading-day volume-weighted average calculation. Amba Auto says its shares had been listed for more than 90 trading days before the relevant date, so it was not required to recompute the issue price under the cited regulations.

Who will receive Amba Auto’s proposed warrants?

Amba Auto proposes to allot warrants to promoters, promoter-group members and non-promoter persons or entities. The eight named promoter and promoter-group allottees would receive 1.20 crore of the 1.60 crore warrants, including 25 lakh for Pradeep Kumar Lohia and 23 lakh each for Rakesh Kumar Lohia, Rachna Lohia, Vikash Kumar Lohia and Shilpy Lohia.

Assuming full conversion, Pradeep Kumar Lohia’s holding would increase from 40.50 lakh shares, or 22.10%, to 65.50 lakh shares, or 19.08% of enlarged capital. Rakesh Kumar Lohia and Vikash Kumar Lohia would each hold 67.96 lakh shares, or 19.80%, after receiving 23 lakh warrants apiece, compared with 24.54% each before the issue.

The remaining 40 lakh warrants are proposed for non-promoter allottees, led by Rohit Lohia with 7.50 lakh warrants. Krisha V Talreja and Sanjay Harshadrai Mehta would each receive 2.68 lakh warrants, while Amba Auto says no promoters, promoter-group members, directors, key managerial personnel or senior management other than the listed allottees intend to subscribe.

What approvals and dates apply to Amba Auto’s issue?

Amba Auto requires shareholder approval through a special resolution at its December 3, 2026 extraordinary general meeting. Subject to the resolution and required approvals, the company proposes to allot the warrants within 15 days of the resolution, or within 15 days from the last regulatory approval if any approval remains pending.

Equity shares issued on exercise are to be allotted within 15 days from the relevant exercise notice and will rank pari passu with existing equity shares, including for dividends. The warrants and shares issued upon exercise will also be subject to lock-in requirements prescribed under the Securities and Exchange Board of India regulations.

The stated ₹161.60 crore use plan assumes 100% subscription and conversion of the warrants within the stipulated 18-month period. The proposed amount is therefore not due at allotment alone, because 75% of the warrant price is payable only when each holder chooses to exercise.

Conclusion

Amba Auto’s proposal combines ₹64.65 crore earmarked for loan repayment or prepayment with ₹56.95 crore for working capital and network-related capital expenditure. The remaining ₹40 crore is proposed for general corporate purposes, while the maximum ₹161.60 crore depends on full subscription and subsequent warrant conversion.

The next disclosed event is the December 3, 2026 extraordinary general meeting, where shareholders will vote on the special resolution. If approved and required permissions are in place, warrant allotment is targeted within 15 days, followed by an 18-month exercise window and management’s 24-month target for using funds after receipt.