Company’s Bonus Issue Makes ₹890 and ₹75 Prices Incomparable

Company’s ₹890 preferential allotments and its later ₹75 allotments are not directly comparable because a September 28, 2024 bonus issue gave 15 additional Equity Shares for every one share held. Each ₹890 pre-bonus share consequently became 16 shares, producing a mechanical post-bonus equivalent of ₹55.625 per share.

What was Company’s September 2024 share-capital sequence?

Company allotted 205,130 Equity Shares, or ordinary ownership shares, at ₹890 each through three cash preferential allotments before the September 28, 2024 bonus issue. Chanakya Opportunities Fund - I received 56,200 shares on August 16, 2024; 19 allottees received 143,310 shares on September 19, 2024; and VPK Global Ventures Fund Scheme - I received 5,620 shares on September 23, 2024. Each share had a face value, or nominal value, of ₹10.

The September 19, 2024 allotment was the largest of the three ₹890 transactions and took cumulative shares to 28.70 lakh from 27.27 lakh. The September 23, 2024 allotment then increased the count to 28.76 lakh shares. That 28.76 lakh-share base determined the number of bonus shares issued five days later.

How did Company’s bonus issue change the ₹890 share price?

Company’s September 28, 2024 bonus issue allotted 4.31 crore shares, equal to 15 bonus shares for each of the 28.76 lakh then outstanding shares. The share count therefore rose 16 times, to 4.60 crore from 28.76 lakh, because holders retained their original shares while receiving 15 additional shares. Paid-up share capital rose from ₹2.87602 crore to ₹46.01632 crore as the face value remained ₹10 per share.

The September 28, 2024 allocation covered all shareholders on the register, including promoters and investors who had acquired shares at ₹890. Sanjay Kumar Sarraf received 2.51 crore bonus shares, Krishna Ranjan received 1.20 crore, Chanakya Opportunities Fund - I received 8.43 lakh, and VPK Global Ventures Fund Scheme - I received 84,300. The allocation shows that the 15-for-one ratio applied to existing holdings rather than a specific shareholder category.

Company recorded the September 28, 2024 transaction as a bonus issue with no cash consideration and no issue price. The historical price adjustment follows from the disclosed ratio: ₹890 paid for one pre-bonus share is spread over 16 post-bonus shares, resulting in ₹55.625 per post-bonus share. The calculation changes the per-share comparison, not the amount paid in the original cash allotment.

Why are Company’s ₹890 and ₹75 prices incomparable without adjustment?

Company’s ₹890 price applied to a pre-bonus share, while the ₹75 price applied to a post-bonus share after the September 28, 2024 16-fold increase in shares. On a common post-bonus basis, the earlier ₹890 price equates mechanically to ₹55.625 per share. Comparing ₹890 with ₹75 without accounting for the bonus would compare one pre-bonus share with one of the 16 shares resulting from it.

Company allotted 13.04 lakh shares at ₹75 on October 5, 2024, seven days after the bonus issue, taking cumulative shares to 4.73 crore. The recipients included Deepa Gupta with 1.16 lakh shares, Nidhi Gupta with 1.20 lakh, Sharad Gupta with 1.64 lakh, and Equity Generational Breakout Shares to Capital Fund - I with 6.68 lakh shares. This was a cash preferential allotment at the same ₹10 face value as the earlier shares.

Company made a second post-bonus preferential allotment of 4.89 lakh shares at ₹75 on October 15, 2024, taking cumulative shares to 4.78 crore. Qmin Industries Limited received 2.33 lakh shares and Brajesh Bhagat received 80,000 shares in that allotment. Together, the October 5 and October 15 placements added 17.93 lakh shares, equivalent to 3.75% of the 4.78 crore shares outstanding after the second placement.

On the 16-share basis created by the bonus issue, ₹75 per post-bonus share corresponds arithmetically to ₹1,200 for 16 shares. That is a capital-structure comparison only: it does not establish Company’s value, explain the pricing of either allotment, or determine the public-issue price. Company stated that the public-issue price would be determined after the bid or issue closing date in consultation with the book running lead manager.

How concentrated was Company’s ownership after the restructuring?

Company’s two promoters held 4.19 crore Equity Shares, or 87.64% of the 4.78 crore pre-issue paid-up shares, as of the Red Herring Prospectus date. Sanjay Kumar Sarraf held 2.91 crore shares, representing 60.78%, and Krishna Ranjan held 1.28 crore shares, representing 26.86%. These holdings reflect, among other transactions, the September 28, 2024 bonus allocation and transfers recorded on January 24, 2025.

Company’s promoters and promoter group together held 4.26 crore shares, or 89.11% of pre-issue paid-up capital. Anita Sarraf held 7 lakh shares, or 1.46%, while Anuradha Sharma, Akshat Sarraf, Ayushi Sarraf and Arvind Sarraf each held 160 shares. The promoter group’s 89.11% holding was 1.47 percentage points above the 87.64% held by the two named promoters alone.

Company had authorised share capital of 7 crore Equity Shares with a ₹10 face value, compared with 4.78 crore issued, subscribed and paid-up shares before the proposed issue. Its board authorised an issue of up to 1.77 crore Equity Shares on May 22, 2025, and shareholders approved it on May 27, 2025. If all 1.77 crore shares were issued, the share count would reach 6.55 crore, remaining within the 7 crore authorised-share limit.

Conclusion

Company’s capital history shows that the ₹890 and ₹75 preferential-allotment prices are separated by a material share-count change. The September 28, 2024 bonus issue converted 28.76 lakh shares into 4.60 crore shares and created a mechanical post-bonus equivalent of ₹55.625 for the earlier ₹890 price. The two October 2024 allotments then added 17.93 lakh post-bonus shares at ₹75, bringing paid-up shares to 4.78 crore.

The next disclosed capital-structure development is the proposed issue of up to 1.77 crore Equity Shares authorised in May 2025. Company had not disclosed the final public-issue price or post-issue promoter ownership percentages in the Red Herring Prospectus, leaving the eventual dilution of the pre-issue 87.64% promoter holding and 89.11% promoter-group holding unresolved.