Mittal promoter group retains 66.85% after primary share issue

Mittal promoter group would retain a derived 66.85% of equity shares after the proposed primary share issue, based on disclosed share counts. The group’s 1,08,01,200 shares would remain unchanged while 45,56,800 new shares increase paid-up equity from 1,16,01,200 to 1,61,58,000 shares.

How will Mittal promoter group retain 66.85% after the primary share issue?

Mittal promoter group would retain 66.85% because the draft prospectus shows no reduction in its 1,08,01,200 shares and proposes 45,56,800 new equity shares. Dividing 1,08,01,200 shares by the stated post-issue capital of 1,61,58,000 shares produces 66.85%. The calculation assumes full subscription to the proposed issue and no change in promoter or promoter-group holdings before allotment.

The pre-issue shareholding pattern classifies 1,08,01,200 of 1,16,01,200 shares, or 93.10%, as held by promoters and the promoter group. The public category holds the remaining 8,00,000 shares, or 6.90%. The filing states that one equity share carries one vote, so the derived 66.85% holding would represent a majority of voting rights on the disclosed post-issue share-count basis.

Is Mittal promoter group selling shares in the proposed issue?

Mittal promoter group is not shown as selling shares in the proposed issue because the draft prospectus records the 45,56,800 equity shares under an Initial Public Offer, or IPO, line within the public category. The before-and-after ownership table keeps the promoter and promoter-group share count at 1,08,01,200 shares. The proposed transaction is therefore a primary issuance, meaning the company creates new shares rather than the filing identifying a sale of existing promoter shares.

The new shares would expand the outstanding share count by 39.28%, calculated as 45,56,800 divided by 1,16,01,200 pre-issue shares. Public holdings would rise to 53,56,800 shares when the 45,56,800 IPO shares are added to the existing 8,00,000 public shares. This produces a derived public holding of 33.15%, an increase of 26.25 percentage points from the disclosed 6.90% before the issue.

The existing public shares are concentrated in two shareholders: Flaxen Textiles Private Limited and Citadel Textiles Private Limited hold 4,00,000 shares each, representing 3.45% each of pre-issue capital. The draft does not allocate the proposed public issue between investor categories because the market-maker portion and net issue fields remain blank. Final allocation, rather than the aggregate 45,56,800-share issue, will determine the individual public holders after allotment.

Which holders make up Mittal promoter group ownership?

Mittal promoter group ownership is concentrated in Yash Vinod Mittal and Harsh Vinod Mittal, who together hold 86,04,940 shares, or 74.18% of the pre-issue capital. Yash Vinod Mittal holds 43,91,795 shares, or 37.86%, and Harsh Vinod Mittal holds 42,13,145 shares, or 36.32%. If their holdings remain unchanged, they would together hold a derived 53.26% of the 1,61,58,000 post-issue shares.

Sweta Yash Mittal, the third promoter, holds 2,95,000 shares, or 2.54% of pre-issue capital. The promoter group consists of Radha Vinodkumar Mittal with 9,00,000 shares, Vinod Mangalchand Mittal with 5,80,060 shares, Poonam Harsh Mittal with 3,21,200 shares, and Harsh V Mittal HUF and Yash V Mittal HUF with 50,000 shares each. HUF means Hindu Undivided Family, a recognised family ownership arrangement; these five promoter-group holders collectively own 19,01,260 shares.

The draft says none of the 88,99,940 shares held by the three promoters is subject to a pledge. It also records that promoters confirmed their holdings were funded through personal funds or internal accruals, rather than loans or financial assistance from banks or financial institutions. Those statements apply to the disclosed promoter holdings and do not alter the dilution calculation from the 45,56,800 new shares.

What changes and restrictions could affect Mittal promoter group ownership?

Mittal promoter group ownership changed among certain members before the proposed issue, although the current disclosed total is 1,08,01,200 shares. On March 31, 2024, Harsh Vinod Mittal and Yash Vinod Mittal each received 12,78,045 shares through transfers from Vinod Mangalchand Mittal. The major-shareholder table for two years before the draft listed Vinod Mangalchand Mittal with 31,04,900 shares, or 27.06%, compared with 5,80,060 shares, or 5.00%, in the current table.

The paid-up share count increased from 1,10,00,000 shares after the March 30, 2022 rights issue to 1,14,76,200 after the March 28, 2023 rights issue and 1,16,01,200 after the March 31, 2024 rights issue. The 2023 rights issue allotted 4,76,200 shares at Rs 42 per share, while the 2024 rights issue allotted 1,25,000 shares at Rs 80 per share. The current major-holder table is unchanged from the tables for 10 days and one year before the draft prospectus for shareholders holding at least 1% of capital.

The company says it will not issue further capital, including through a bonus issue, preferential allotment or rights issue, between the draft prospectus date and listing, or until application money is unblocked if the issue fails. It also does not intend to split or consolidate the Rs 10 face value of equity shares within six months of the offer opening. After listing, the board may issue equity shares or securities convertible into equity shares for an acquisition, merger, joint venture, regulatory compliance or another purpose it considers appropriate.

Conclusion

The proposed primary share issue would reduce Mittal promoter group ownership from 93.10% to a derived 66.85% without reducing the group’s disclosed 1,08,01,200 shares. The change arises from a 39.28% expansion in the equity base, while the public category would increase from 6.90% to a derived 33.15% of post-issue shares.

The final prospectus is the next document to watch because its blank post-issue ownership fields, market-maker allocation and promoter-contribution details are due to be updated. The company also says it will file its shareholding pattern under Regulation 31 of the Securities and Exchange Board of India Listing Obligations and Disclosure Requirements Regulations, 2015, one day before listing, providing the final allotment-based ownership position.