Hittco Tools offer could give acquirers 76.87% control

Hittco Tools Limited could come under the effective control of three acquirers holding 76.87% on a fully diluted basis if the preferential allotment, warrant conversion and 26.00% open offer are completed with full acceptance. The proposal, approved by the board on 26 October 2026, requires shareholder and applicable regulatory approvals.

How would Hittco Tools’ control change after the transaction?

Hittco Tools’ three acquirers would rise from no holding on the 26 October 2026 public-announcement date to 50.87% of expanded voting capital after the proposed allotments and full warrant conversion. If all 58,77,261 shares sought through the open offer are tendered, their combined holding would increase to 1,73,77,261 shares, or 76.87% of expanded capital.

The immediate preferential share allotment would give the acquirers 52,00,000 shares, equal to 41.45% of the emerging equity and voting capital of 1,25,44,847 shares. Irfan Ismail Chapra and Reshma Irfan Chapra would each receive 18,00,000 shares, or 14.35%, while Mubina Gulzar Sofia would receive 16,00,000 shares, or 12.75%.

The mandatory offer arises under Regulations 3(1) and 4 of the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011, which cover substantial acquisition and change in control. The acquirers state that they would assume control and be classified as Hittco Tools’ promoters after the offer and preferential allotment are completed, subject to applicable requirements.

What preferential issue is proposed at Hittco Tools?

Hittco Tools proposes to issue 59,40,000 equity shares and 1,00,60,000 convertible warrants at Rs 14.50 each, subject to shareholder approval at an extraordinary general meeting scheduled for 17 November 2026. The equity-share portion allocates 52,00,000 shares to the three acquirers and 7,40,000 shares to public-category investors.

The warrant issue would add 1,00,60,000 potential equity shares because each warrant is convertible into one share. Of that total, 63,00,000 warrants are proposed for the acquirers and 37,60,000 for public-category investors, taking expanded voting capital to 2,26,04,847 shares from existing equity and voting capital of 66,04,847 shares.

On full conversion, Irfan Ismail Chapra would hold 44,00,000 shares, or 19.46% of expanded capital, and Reshma Irfan Chapra would also hold 44,00,000 shares, or 19.46%. Mubina Gulzar Sofia would hold 27,00,000 shares, or 11.94%, leaving the three with 1,15,00,000 shares before purchases in the open offer.

The proposed allotment cannot transfer voting rights to the acquirers before the takeover rules allow it. The filing says they must either complete the acquisition after the offer period or use the applicable escrow mechanism, under which allotted shares remain in escrow and cannot be voted until conditions for transfer to their demat accounts are fulfilled.

What are the Hittco Tools open-offer terms for shareholders?

Hittco Tools shareholders are offered Rs 15.30 in cash for every fully paid equity share and Rs 10.30 for every partly paid share, with the acquirers seeking up to 58,77,261 shares. The maximum purchase represents 26.00% of expanded equity and voting capital, and the offer does not require a minimum level of shareholder acceptance.

Hittco Tools has 2,47,600 partly paid shares, each with a Rs 10 face value and paid up to Rs 5. Tendered shares would be acquired free of liens, charges and encumbrances, with attached voting rights and rights to dividends, bonus issues and rights offers declared after the offer terms take effect.

The public announcement was submitted to BSE Limited, the Securities and Exchange Board of India and Hittco Tools on 26 October 2026. The detailed public statement was published on 2 November 2026, and the draft letter of offer is dated 9 November 2026; no competing offer had emerged by that date.

The acquirers deposited Rs 1.50 crore in cash into an escrow account with ICICI Bank Limited on 27 October 2026 and provided a Rs 77 lakh bank guarantee. The Rs 2.27 crore aggregate escrow equals 25.00% of the stated open-offer consideration and is intended to secure the acquirers’ obligations under the takeover regulations.

Who are the proposed Hittco Tools acquirers and what is their plan?

Hittco Tools’ proposed acquirers are Irfan Ismail Chapra, Reshma Irfan Chapra and Mubina Gulzar Sofia, each of whom held no shares or voting rights on 26 October 2026. The filing says none acquired Hittco Tools shares between that public announcement and the 9 November 2026 draft letter of offer.

Irfan Ismail Chapra has more than 42 years of professional experience, comprising 24 years in the Central Government Revenue Department and 18 years in business. His certified net worth was Rs 23.0011 crore as of 25 October 2026, while Reshma Irfan Chapra, who has more than 25 years of healthcare experience, had certified net worth of Rs 25.0991 crore on the same date.

Mubina Gulzar Sofia has more than five years of experience in litigation and legal consultation, according to the filing, and had certified net worth of Rs 4.411 crore as of 1 September 2026. The three state that they have no relationship or association with Hittco Tools or its existing promoters other than the proposed preferential holding.

The acquirers say their primary objective is to obtain management control and use Hittco Tools as a ready listing platform. They propose to continue the cutting-tools business and may diversify into other business areas, subject to requisite approvals, including shareholder approval where applicable.

What happens to Hittco Tools’ listing and management?

Hittco Tools is intended to remain listed, although the acquirers undertake to restore the required public shareholding if their stake exceeds the permitted non-public level after the offer. The Securities Contracts (Regulation) Rules, 1957 and Listing Obligations and Disclosure Requirements Regulations require at least 25% public shareholding on a continuous basis.

The filing contains no final proposal to change the board. The acquirers may seek board changes in accordance with applicable law, but no proposal had been finalised as of 9 November 2026; the filing also says management change may happen only after open-offer completion because 25.00% of the offer consideration had been deposited.

The acquirers state that they have no plan to sell, dispose of or encumber significant Hittco Tools assets in the two years after the offer closes, except in the ordinary course of business or for restructuring or rationalisation. A substantial disposal outside the ordinary course would require prior shareholder approval through a special resolution under the takeover rules.

Conclusion

The proposed transaction would materially alter Hittco Tools’ ownership structure, taking the acquirers from no shares to 41.45% after the preferential share allotment and 50.87% after full conversion of their warrants. Full acceptance of the 26.00% open offer would take their combined holding to 76.87%, combining fresh capital issuance with a cash route for public shareholders to tender shares.

The next disclosed milestone is the extraordinary general meeting planned for 17 November 2026, where shareholders will consider the issue of 59,40,000 shares and 1,00,60,000 warrants. The independent directors’ reasoned recommendation must be published at least two working days before tendering begins, while the eventual public-shareholding level will determine whether the acquirers need to reduce their non-public holding.