Dove Soft share base rose more than 250-fold after 2022

Dove Soft expanded its equity share base more than 250-fold, from 74,185 shares before 7 July 2022 to 1,90,58,755 shares at the Red Herring Prospectus date. The principal change was a 140:1 bonus issue that added 1,03,85,900 shares, followed by a rights issue and unsecured-loan conversion in October 2022.

How did Dove Soft’s share base rise more than 250-fold?

Dove Soft’s share base rose more than 250-fold because 1,78,85,900 of the 1,89,84,570 shares added between 31 January 2022 and the prospectus date were issued in 2022. The company had 74,185 fully paid equity shares after its 31 January 2022 allotments. It had 1,80,60,085 shares by 6 October 2022, before a further 9,98,670-share preferential allotment on 31 December 2024.

The 7 July 2022 bonus issue was the decisive event in the expansion. It raised the cumulative number of equity shares from 74,185 to 1,04,60,085, an increase of 1,03,85,900 shares. The two 6 October 2022 allotments then added 75,00,000 shares, comprising 59,03,000 rights shares and 16,97,000 shares issued on conversion of an unsecured loan.

Paid-up capital, which is the aggregate face value of issued shares, moved with the share count because each equity share had a face value of Rs 10. Paid-up capital was Rs 7.42 lakh after the January 2022 allotments, Rs 10.46 crore after the bonus issue and Rs 18.06 crore after the October 2022 issuances. The 2024 preferential allotment took paid-up capital to Rs 19.06 crore.

What did Dove Soft’s 140:1 bonus issue change?

Dove Soft’s 140:1 bonus issue increased the outstanding share count by about 141 times on 7 July 2022. A 140:1 ratio, as disclosed by Dove Soft, meant 140 bonus equity shares for every one equity share held. The 1,03,85,900 shares issued represented about 99% of the 1,04,60,085 shares outstanding immediately after the allotment.

The capital-history table records the bonus shares as issued for consideration other than cash and shows cumulative securities premium of nil after the allotment. Dove Soft also states that it has not issued equity shares out of revaluation reserves since incorporation, including through the capitalisation of revaluation reserves. The source therefore identifies the bonus issue as a share-capital restructuring rather than an issuance from revaluation reserves.

The bonus allotment was distributed among eight named holders. Rahul Bhanushali received 41,54,360 shares, Sky Ocean Infrastructure Limited received 21,11,620 shares and Rajabhau Phad received 15,57,920 shares. Those three allotments totalled 78,23,900 shares, or about 75% of the 1,03,85,900 bonus shares.

Which 2022 issuances followed Dove Soft’s bonus issue?

Dove Soft issued another 75,00,000 shares on 6 October 2022, taking its total from 1,04,60,085 shares after the bonus issue to 1,80,60,085 shares. The first component was a 59,03,000-share rights issue for cash at Rs 10 per share. The rights ratio was 57 shares for every 100 shares held, and the allotment table names Rahul Bhansuhali and Kurjibhai Rupareliya as recipients.

The second 6 October 2022 component was the allotment of 16,97,000 shares at Rs 10 per share to Rahul Bhansuhali through conversion of an unsecured loan. A debt conversion replaces the disclosed unsecured loan with equity shares rather than recording cash consideration at the allotment. The rights issue and conversion together equalled about 72% of the 1,04,60,085 shares outstanding immediately after the July 2022 bonus issue.

Dove Soft had also used non-cash issuances before the 2022 restructuring, although the scale was much smaller. It issued 8,583 shares through an unsecured-loan conversion on 18 March 2021 at Rs 466 per share and 9,000 shares through loan conversion on 25 March 2021 at Rs 1,000 per share. On 31 January 2022, it issued 25,474 shares through loan conversion and 11,128 shares against a flat, both at Rs 1,100 per share.

How did the 2024 allotment and ownership affect the share base?

Dove Soft’s 31 December 2024 preferential allotment added 9,98,670 shares for cash at Rs 171 per share, including a Rs 161 premium over face value. A preferential allotment is an issue to identified allottees rather than a rights issue made in proportion to existing holdings. The 2024 allotment involved 50 named persons and entities and increased the share count from 1,80,60,085 to 1,90,58,755.

The 2024 issuance was materially smaller than the 2022 changes. Its 9,98,670 shares were about 5.5% of the 1,80,60,085 shares outstanding before the allotment, while the July and October 2022 transactions together added 1,78,85,900 shares. At the prospectus date, Dove Soft reported Rs 16.08 crore in securities premium, compared with nil in the capital-history table immediately after the July 2022 bonus issue.

Ownership remained concentrated in the prospectus shareholding table. The promoters and promoter group held 1,41,63,237 of 1,90,58,755 shares, or 74.32%, while 57 public shareholders held 48,95,518 shares, or 25.68%. The eight holders with at least 1% each held 1,79,60,085 shares, representing 94.24% of paid-up equity capital.

What does Dove Soft’s current capital structure contain?

Dove Soft had one class of fully paid equity shares with a Rs 10 face value, and each equity share carried one vote at the prospectus date. The company reported no partly paid shares, preference share capital, warrants, depository receipts, differential voting-right shares or promoter pledges. It also reported no outstanding convertible instruments, except for options to be granted or exercised under its employee stock option scheme.

Authorized share capital was Rs 35 crore, comprising 3,50,00,000 equity shares of Rs 10 each, compared with 1,90,58,755 issued and paid-up shares. That arithmetic leaves authorization for 1,59,41,245 additional shares within the disclosed authorized capital. Any issuance using that capacity would require the relevant corporate approvals and would change the share count from the prospectus-date figure.

Dove Soft reported 61 shareholders at the prospectus date, comprising four shareholders in the promoters and promoter-group category and 57 public shareholders in the shareholding pattern. The company also said all pre-offer equity shares would be locked in before listing on the SME platform of BSE Limited. The disclosed classification is relevant because the 74.32% promoter and promoter-group holding is based on the pre-offer capital of 1,90,58,755 shares.

Conclusion

Dove Soft’s current equity base primarily reflects a concentrated 2022 capital restructuring rather than a long sequence of outside equity raises. The 140:1 bonus issue created 1,03,85,900 shares, and the subsequent rights issue and unsecured-loan conversion added 75,00,000 more. Together, those three 2022 transactions accounted for about 94% of the 1,89,84,570 shares added from the 74,185-share base to the prospectus-date total.

The next disclosed changes to watch are the proposed fresh issue of up to 53,28,000 equity shares and the listing-stage shareholding pattern required under Regulation 31 of the SEBI Listing Obligations and Disclosure Requirements Regulations, 2015. Dove Soft said it would file that shareholding pattern one day before listing and upload it on the BSE website before trading begins.