Craftroot Retail ₹22 crore warrant issue plan for 2026

Craftroot Retail Limited, formerly known as Nirbhay Colours India Limited, has cleared a capital restructuring plan that combines a preferential issue of convertible warrants with a sharp increase in authorised share capital. The company said its Board of Directors approved the proposals at a meeting held on October 3, 2026. The headline move is a ₹22 crore fundraise through convertible warrants, alongside steps to expand the company’s capacity to issue equity. The approvals are subject to shareholder and regulatory clearances, with an Extraordinary General Meeting (EGM) scheduled in early November.

The company is headquartered in Ahmedabad, and the board meeting was held at its registered office in the city. The proposals are framed under the SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018, and the related stock exchange and shareholder approval process.

Board approvals and what is being proposed

The board approved two linked actions: a preferential allotment of convertible warrants and an increase in authorised share capital. The warrant issue is designed to raise ₹22 crore, while the authorised capital hike is intended to accommodate the potential increase in issued equity if the warrants are converted. The company also indicated that the issuance is meant to include both promoter and public category investors.

Separately, the company disclosed that its trading window for dealing in company securities was closed effective October 1, 2026. The board process and disclosures were made under Regulation 29 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

Authorised share capital to rise to ₹23.5 crore

To support the proposed issuance of new securities and potential future growth, the board approved an increase in authorised share capital from ₹3.5 crore to ₹23.5 crore. The increase is proposed to be implemented by creating an additional 2 crore equity shares with a face value of ₹10 each.

Because authorised share capital is a constitutional matter, the company will amend Clause V (Capital Clause) of its Memorandum of Association (MoA). This amendment will require shareholder approval and regulatory compliance.

Preferential issue: 2 crore convertible warrants at ₹11

The board approved issuing up to 2 crore convertible warrants on a preferential basis at an issue price of ₹11 per warrant. Based on the announced issue price and quantity, the total issue size is ₹22 crore. Each warrant is convertible into 1 fully paid-up equity share of face value ₹10.

The company said the pricing was determined in accordance with Regulations 164 and 166A of the SEBI ICDR Regulations, 2018. The board also noted an external valuation report for the minimum floor price determination under the SEBI framework.

Payment schedule, conversion window, and forfeiture clause

Subscribers are required to pay 25% of the warrant price upfront at the time of allotment. At ₹11 per warrant, this upfront amount works out to ₹2.75 per warrant, with the remaining 75% payable when the conversion option is exercised.

Warrant holders can convert in one or more tranches, but must do so within a maximum period of 18 months from the date of allotment. If any warrants remain unexercised at the end of the 18-month tenure, those warrants will lapse. In such a case, the company will forfeit the initial 25% upfront amount paid against the unexercised warrants.

Allottee split: promoters and public investors

The proposed preferential issue is to be distributed among 14 allottees across promoter and public categories. The promoter category includes 7 allottees and is proposed to receive 1,17,93,000 warrants. The public category includes 7 corporate or LLP allottees and is proposed to receive 82,07,000 warrants.

Post-conversion shareholding disclosures (assuming full conversion)

The company also disclosed an indicative post-issue shareholding structure, assuming full conversion of all 2 crore warrants into equity shares. Under this assumption, promoter individual Anar Patel would hold 10.35% (24,16,870 shares). Dakshesh Shah would hold 10.11% (23,60,814 shares). Corporate promoter Seher Retail Private Limited would hold 9.67% (22,57,974 shares).

These figures are contingent on full conversion of the warrants and the resulting expanded equity base. Actual outcomes will depend on shareholder approval, final allotments, and the pace and extent of warrant exercises within the allowed 18-month window.

Valuation report, relevant date, and SEBI compliance

The board noted a valuation report submitted by Independent Registered Valuer Mr. Manish Santosh Buchasia (IBBI Registration No. IBBI/RV/03/2019/12235). The company said the report determined the minimum floor price under the SEBI ICDR Regulations.

The board fixed October 6, 2026 as the relevant date for determining the pricing of the preferential issue. The company stated that this relevant date falls 30 days prior to the scheduled EGM.

EGM on November 5, 2026 and e-voting scrutiny

An Extraordinary General Meeting of shareholders has been convened for Thursday, November 5, 2026 at the company’s registered office. Shareholders will be asked to approve the preferential allotment and the related authorised capital increase and MoA amendments.

The company also appointed Rupal Patel to scrutinize the e-voting process, as part of its stated regulatory compliance steps for the shareholder vote.

Other disclosures: corporate history and exchange communication

Craftroot Retail’s disclosures also reference its earlier corporate identity as Nirbhay Colours India Limited. Separately, the company said it has issued a formal response to a warning letter from BSE Limited, which related to non-compliance with certain SEBI regulations connected to the company’s recent name change.

The company has also disclosed a past corporate action: a final dividend of ₹0.05 per share dated September 19, 2025.

Market impact and what investors may track

The most direct impact for existing shareholders is potential dilution of ownership percentages if the warrants are converted into equity shares. The structure also creates a clear timeline risk: if warrant holders do not exercise within 18 months, warrants lapse and the upfront 25% amount is forfeited. The company disclosure itself flagged dilution as a primary risk for retail investors in a preferential issue structure.

For investors tracking the process, the immediate milestone is the outcome of the November 5, 2026 EGM. After that, the practical indicators will be the completion of allotment, the inflow from the 25% upfront amount, and the subsequent warrant exercises that bring in the remaining 75% of the issue price.

Key terms at a glance

Conclusion

Craftroot Retail’s board approvals set up a ₹22 crore preferential warrant issue and a proposed increase in authorised share capital to ₹23.5 crore, with conversion terms that run up to 18 months. The next formal step is shareholder approval at the November 5, 2026 EGM, including the MoA amendment required for the capital clause update. Investors will be watching the EGM outcome, subsequent allotment, and the conversion timeline to understand how the company’s equity base and promoter-public mix evolve.