Our Company’s 8-for-1 bonus issue preceded IPO approval

Our Company completed an 8-for-1 bonus issue on September 15, 2025, adding 140 lakh equity shares and raising paid-up equity capital from Rs 1.75 crore to Rs 15.75 crore. The board authorised the proposed IPO on September 16, 2025, and shareholders approved it on September 17, 2025, after the enlarged share base had been created.

How did Our Company’s 8-for-1 bonus issue change the share base?

Our Company’s 8-for-1 bonus issue increased its outstanding equity shares ninefold, from 17.5 lakh to 157.5 lakh shares on September 15, 2025. Under the stated ratio, each existing shareholder received eight new fully paid-up equity shares for every one share already held, while the face value remained Rs 10 per share.

The 140 lakh new shares increased paid-up equity capital from Rs 1.75 crore to Rs 15.75 crore. A bonus issue distributes additional shares to existing holders rather than selling shares for cash, and the prospectus records the consideration for this allotment as not applicable. Our Company says the shares were issued through capitalisation of reserves and surplus, with no part of a revaluation reserve used.

The September 2025 transaction followed a June 14, 2024 subdivision that changed the face value of each equity share from Rs 1,000 to Rs 10. The subdivision changed the number and denomination of shares without changing paid-up capital, whereas the subsequent bonus issue increased paid-up capital by capitalising reserves and surplus.

Why did Our Company approve the IPO after the bonus issue?

Our Company approved the proposed IPO immediately after the bonus allotment, placing the 157.5 lakh-share capital base at the centre of its pre-issue structure. The board of directors authorised an issue of up to 61.248 lakh equity shares on September 16, 2025, one day after the bonus issue, and shareholders approved the proposal through a special resolution at an extraordinary general meeting on September 17, 2025.

The red herring prospectus consequently lists 157.5 lakh issued, subscribed and paid-up equity shares before the issue. It also states that there were no partly paid-up shares and no share application money pending for allotment as of the prospectus date, meaning the disclosed pre-issue capital consisted entirely of fully paid equity shares.

Our Company had increased its authorised equity share capital on July 23, 2025, from Rs 1.75 crore to Rs 25 crore, divided into 2.50 crore equity shares of Rs 10 each. Authorised capital is the maximum nominal share capital a company can issue under its charter, while paid-up capital represents shares that have actually been allotted. The Rs 25 crore authorised level was therefore above the Rs 15.75 crore paid-up level created through the bonus issue.

Who received Our Company’s 140 lakh bonus shares?

Our Company allotted the 140 lakh bonus shares to 14 shareholders on September 15, 2025, in accordance with the 8-for-1 ratio. Prahash Fin Stock Private Limited received the largest disclosed allotment of 24.408 lakh shares, followed by Abhishek Rajendrakumar Agrawal with 20.8 lakh shares and Vinod S. Agrawal with 14 lakh shares.

The allotment also included 13.6 lakh shares each for Shree Bajarangbali Intermediate & Dyechem Private Limited and R. K. Agarwal Trading Co. Private Limited. Siddharth Prakash Patel received 11.304 lakh shares, Swapnil Patel received 11.07008 lakh shares, and Varshaben P Patel received 9.696 lakh shares under the same September 15, 2025 allotment.

Because the issue granted eight new shares for every one existing share, the mechanism maintained each participating holder’s percentage interest immediately after the allotment, assuming no simultaneous change in holdings. The smallest disclosed bonus allotment was 22,592 shares to Sejal Patel, while Chitali Patel received 1.608 lakh shares, illustrating that the number of bonus shares depended on each holder’s pre-bonus position.

What did the enlarged share base mean for ownership before the IPO?

Our Company’s promoter and promoter group held 94.176 lakh of the 157.5 lakh pre-issue shares, representing 59.79%, while 12 public shareholders held 63.324 lakh shares, or 40.21%. The shareholding pattern, prepared under Regulation 31 of the Securities and Exchange Board of India Listing Obligations and Disclosure Requirements Regulations, 2015, identifies 17 shareholders in total.

Prahash Fin Stock Private Limited was the largest individual pre-issue holder, with 27.459 lakh shares or 17.43% of paid-up capital. Abhishek Rajendrakumar Agrawal held 23.4 lakh shares or 14.86%; together, the two holders owned 50.859 lakh shares, equal to 32.29% of the 157.5 lakh pre-issue shares.

Assuming full subscription to the proposed issue of up to 61.248 lakh equity shares, the prospectus models post-issue share capital of 218.748 lakh shares. On that basis, promoter and promoter-group holdings would remain 94.176 lakh shares but account for 43.05%, compared with 59.79% before the issue. That projected percentage change results from the addition of new IPO shares, not from a disclosed sale of promoter or promoter-group shares.

What other capital-structure disclosures apply to Our Company?

Our Company reports one class of fully paid equity shares, each with a face value of Rs 10, and states that all equity shares rank pari passu, meaning they carry equal rights within that class. It also reports no outstanding convertible instruments, warrants, employee stock option scheme or stock appreciation rights scheme as of the red herring prospectus date.

The prospectus states that Our Company has not revalued its assets since incorporation and has not issued bonus shares by capitalising revaluation reserves. It also says no equity shares have been allotted under a scheme approved under Sections 230 to 234 of the Companies Act, 2013, provisions that cover specified compromises, arrangements and amalgamations.

The September 15, 2025 bonus issue is identified as the disclosed instance of equity shares issued for consideration other than cash since incorporation. The capital structure also records no partly paid equity shares, no depository receipts and no shares with differential voting rights, while all pre-IPO equity shares are to be locked in before listing on NSE Emerge.

Conclusion

Our Company’s September 15, 2025 bonus issue reshaped its pre-IPO capital structure by adding 140 lakh shares and increasing paid-up equity capital to Rs 15.75 crore. The board and shareholder approvals on September 16 and September 17, 2025 show that the proposed IPO was authorised after, rather than before, the ninefold expansion in outstanding shares.

The next disclosed change to watch is the proposed issue of up to 61.248 lakh equity shares. If the issue is fully subscribed, the prospectus projects 218.748 lakh total shares and promoter and promoter-group ownership of 43.05%; the final post-issue ownership position remains subject to the basis of allotment.