Company Built Rs 2.64 Crore Capital Through Four Allotments

Company built Rs 2.64 crore of paid-up capital from Rs 5 lakh at incorporation through a 14:1 bonus issue, promoter-loan conversion and two private placements between September 2024 and February 2025. The Rs 1.60 crore nominal-capital increase from the October 7, 2024 loan conversion was the largest single addition.

How did Company build Rs 2.64 crore of paid-up capital?

Company built its Rs 2.64 crore paid-up capital through four allotments after incorporation, while a November 2024 share subdivision changed the number and face value of shares without changing capital. The capital history begins with 50,000 equity shares of Rs 10 each, representing Rs 5 lakh of paid-up capital, and ends with 52,72,873 fully paid equity shares of Rs 5 each on February 12, 2025.

The four allotments added Rs 2.59 crore of nominal capital beyond the Rs 5 lakh incorporation amount. The September 27, 2024 bonus issue lifted paid-up capital to Rs 75 lakh, the October 7 loan conversion took it to Rs 2.35 crore, the October 22 private placement raised it to Rs 2.52 crore, and the February 12, 2025 placement brought it to Rs 2.64 crore.

Company expanded its authorised share capital before the allotments. On September 11, 2024, authorised capital increased from Rs 5 lakh, divided into 50,000 shares of Rs 10 each, to Rs 5 crore, divided into 50,00,000 shares of Rs 10 each; the November 21, 2024 subdivision later converted that authority into 1,00,00,000 shares of Rs 5 each.

What did the 14:1 bonus issue and loan conversion change?

Company's 14:1 bonus issue increased paid-up capital from Rs 5 lakh to Rs 75 lakh without cash consideration. On September 27, 2024, Company allotted 7,00,000 equity shares of Rs 10 each, giving 14 new shares for every one share held; Rohit Agarwal and Sachin Agarwal each received 3,50,000 shares.

Company funded the Rs 70 lakh nominal increase by capitalising free reserves, meaning that reserves and surplus were transferred to share capital rather than new money being received. Company states that it had not revalued assets since inception and had not issued equity shares, including bonus shares, by capitalising revaluation reserves.

Company then converted promoter loans into equity on October 7, 2024, allotting 16,00,000 shares of Rs 10 each at Rs 19.16 per share. Rohit Agarwal and Sachin Agarwal each received 8,00,000 shares, with the Rs 9.16 per-share difference over face value recorded as securities premium and the consideration classified as other than cash.

The loan conversion increased nominal paid-up capital by Rs 1.60 crore, from Rs 75 lakh to Rs 2.35 crore. It accounted for about 62% of the Rs 2.59 crore increase in nominal capital from incorporation through February 2025, showing that conversion of existing promoter funding, rather than the cash placements, was the largest mechanism in the capital build-up.

How did the placements and share split affect Company’s equity base?

Company issued shares to AWA Endeavor LLP in both cash private placements, first at Rs 87 per share before the split and then at Rs 44 per share after it. On October 22, 2024, AWA Endeavor LLP received 1,72,800 shares of Rs 10 each at a premium of Rs 77 per share; on February 12, 2025, it received 2,27,273 shares of Rs 5 each at a premium of Rs 39 per share.

The October 2024 placement added Rs 17.28 lakh of nominal share capital, moving paid-up capital from Rs 2.35 crore to Rs 2.52 crore. The February 2025 placement added Rs 11.36 lakh of nominal capital, taking the recorded total from Rs 2.52 crore to Rs 2.64 crore, although its cash issue price of Rs 44 exceeded the Rs 5 face value.

Company's November 21, 2024 subdivision did not raise paid-up capital. The board resolution of November 20, 2024 and shareholder special resolution of November 21, 2024 split each Rs 10 equity share into two Rs 5 equity shares, doubling the issued, subscribed and paid-up share count from 25,22,800 to 50,45,600 while retaining paid-up capital of Rs 2.52 crore.

How concentrated was Company’s ownership before the proposed issue?

Company's promoters and promoter group held 48,89,540 of 52,72,873 pre-issue equity shares, or 92.73%, as of the Red Herring Prospectus date. The public category held 3,83,333 shares, or 7.27%, and Company reported no outstanding convertible instruments or preference share capital.

Rohit Agarwal and Sachin Agarwal each held 23,49,950 shares of Rs 5 each, equal to 44.57% of pre-issue capital. Together, their 46,99,900 shares represented 89.14%, while Richa Agarwal held 1,36,620 shares, or 2.59%, and Deepa Agarwal held 53,020 shares, or 1.00%.

The disclosed ownership record shows that AWA Endeavor LLP held 2,69,312 shares, or 5.11%, one year before the Red Herring Prospectus filing date. At the Red Herring Prospectus date, Company reported 35 public shareholders holding 3,83,333 shares; the capital-structure disclosure does not specify the transactions that produced the difference between those two positions.

What does Company’s capital history establish?

Company's capital history establishes that its Rs 2.64 crore paid-up base combines three distinct sources: Rs 70 lakh from capitalising free reserves, Rs 1.60 crore from converting loans into equity, and Rs 28.64 lakh of nominal capital from two cash private placements. The distinction matters because paid-up capital measures the face value of issued shares, whereas the Rs 87 and Rs 44 placement prices also included securities premium.

Company has one class of fully paid equity shares, with a face value of Rs 5 each as of the Red Herring Prospectus date. Company also states that it has no employee stock option scheme, employee stock purchase scheme or stock appreciation rights scheme, and does not intend to allot shares to employees under employee stock option or employee stock purchase schemes from the proposed issue.

Conclusion

Company assembled its paid-up capital rapidly between September 2024 and February 2025, but the mechanisms had different effects. The bonus issue converted free reserves into capital, the loan conversion replaced promoter loans with equity, and the two placements brought cash consideration, while the share split only changed the denomination and number of shares.

The next disclosed change to watch is the proposed fresh issue's effect on ownership. Company states that promoter and promoter-group ownership would move from 92.73% before the issue to 64.91% after it, while the prospectus currently reports no outstanding convertible instruments or employee equity schemes that would otherwise alter the share count.