R.K. Fashion Accessories bonus issue leaves promoters nil WACC

R.K. Fashion Accessories issued 1.06 crore equity shares in a 16-for-1 bonus issue on March 19, 2026, and reported nil weighted average cost of acquisition, or WACC, for promoter and promoter-group shares acquired in each disclosed recent period. Promoters and the promoter group held 99.67% of pre-offer equity capital.

How did R.K. Fashion Accessories produce nil promoter WACC?

R.K. Fashion Accessories produced nil promoter WACC principally through the March 19, 2026 bonus issue of 1,05,87,824 equity shares for no cash consideration. The 16-for-1 issue gave 16 bonus shares for every one share held on the record date and increased paid-up equity shares from 6,61,739 to 1,12,49,563 shares.

A bonus issue gives existing shareholders additional shares by capitalising reserves rather than receiving cash from them. R.K. Fashion Accessories said the March 2026 allotment capitalised reserves and surplus available for distribution as of September 30, 2025, with no revaluation reserve used. Every equity share has a face value of Rs 10 and the bonus shares were fully paid when allotted.

WACC is the average per-share acquisition or subscription cost within a stated period, weighted by the shares acquired. R.K. Fashion Accessories reported nil WACC for each named promoter and promoter-group holder over the one-year, 18-month and three-year periods before the draft red herring prospectus. This is a historical cost disclosure, not a statement about the value of the company or the offer.

The filing separately reports average acquisition cost across each person’s total holding. Mohammed Usman’s reported average cost was Rs 0.37 per share for 67,63,076 shares, while MD Qasim’s was Rs 0.65 per share for 44,40,196 shares. MD Aurangzeb and Mohammed Imran each had an average acquisition cost of Rs 0.00 for 1,700 shares.

Who received the R.K. Fashion Accessories bonus shares?

R.K. Fashion Accessories allotted 1,05,44,256 of the 1,05,87,824 March 2026 bonus shares to Mohammed Usman and MD Qasim. Mohammed Usman received 63,65,248 shares and MD Qasim received 41,79,008 shares, together representing 99.59% of the bonus allotment by calculation from the disclosed share counts.

The seven other holders received 43,568 shares in total under the same 16-for-1 ratio. MD Aurangzeb, Mohammed Imran, Shaistan Usman, Afreen Imran and Farah Aurangzeb each received 1,600 shares. Public shareholders Md Shahid Bagsarya and Md Farooque Bagsarya received 14,352 and 21,216 shares respectively.

The promoter build-up schedule records a different MD Qasim bonus figure of 41,79,088 shares, 80 shares above the bonus-allotment table’s 41,79,008 shares. The pre-offer shareholding table reports MD Qasim holding 44,40,196 shares. R.K. Fashion Accessories does not explain the 80-share difference in the supplied disclosures.

How concentrated was R.K. Fashion Accessories ownership before the offer?

R.K. Fashion Accessories had 99.67% of pre-offer equity capital held by promoters and the promoter group. The four promoters held 1,12,06,672 shares, or 99.61% of 1,12,49,563 outstanding shares, while three promoter-group holders owned 5,100 shares, or 0.06%.

Mohammed Usman held 67,63,076 shares, equal to 60.11% of pre-offer capital, and MD Qasim held 44,40,196 shares, equal to 39.46%. Their combined 1,12,03,272 shares represented 99.57% of the company’s pre-offer capital. MD Aurangzeb and Mohammed Imran each held 1,700 shares, or 0.02%.

The public category consisted of two holders with 37,791 shares, or 0.33% of pre-offer capital. Md Shahid Bagsarya held 15,249 shares and Md Farooque Bagsarya held 22,542 shares. R.K. Fashion Accessories reported nine shareholders, one class of equity shares, no partly paid shares and no outstanding convertible instruments.

The March 2026 bonus issue enlarged the share count without materially changing the two principal holders’ relative control. One year before the draft prospectus, Mohammed Usman held 3,98,028 shares, or 60.35%, and MD Qasim held 2,61,488 shares, or 39.65%. At the draft prospectus date, their holdings had increased to 67,63,076 and 44,40,196 shares, while their stated proportions were 60.11% and 39.46%.

What do prior capital transactions show about the bonus issue?

R.K. Fashion Accessories’ March 2026 bonus issue was its largest disclosed change in paid-up equity capital. The 1.06 crore-share allotment exceeded the 5,27,516 shares issued through the March 31, 2024 scheme of amalgamation and the 2,223 shares issued through loan conversion on May 31, 2025.

The March 2024 amalgamation allotment capitalised reserves and surplus available for distribution at the financial year ended March 31, 2024. Mohammed Usman, MD Qasim, Mohammed Imran and MD Aurangzeb received all 5,27,516 shares, and R.K. Fashion Accessories said no revaluation reserve was used. The company also states that it has not revalued assets since incorporation on March 23, 2010.

The May 2025 loan conversion issued 897 shares to Md Shahid Bagsarya and 1,326 shares to Md Farooque Bagsarya at Rs 272 per share, including Rs 262 share premium. That conversion was consideration other than cash, but it was distinct from the March 2026 bonus issue made at nil issue price. The company said that, except for the bonus issue, equity shares issued within the preceding year were below the offer price.

What lock-in and capital restrictions apply after the offer?

R.K. Fashion Accessories states that 20% of fully diluted post-offer capital held by promoters will be locked in for three years from allotment under the Securities and Exchange Board of India Issue of Capital and Disclosure Requirements Regulations. Promoter holdings exceeding the minimum promoter contribution will be subject to disclosed one-year and two-year lock-in periods.

The final schedule identifying locked-in promoter shares remained marked for update in the red herring prospectus, subject to finalisation of the basis of allotment. R.K. Fashion Accessories also confirms that the shares proposed for minimum promoter contribution are dematerialised and not pledged or otherwise encumbered. The company reported no pledge over any promoter or promoter-group shares at the draft prospectus date.

All pre-offer equity shares are to be locked in before listing on the NSE Emerge small and medium enterprise platform. R.K. Fashion Accessories also says it will not issue further capital, including bonus shares, rights shares or preferential allotments, between the draft prospectus date and listing or failure of the offer. This restriction applies to the 1,12,49,563 pre-offer shares during that interval.

Conclusion

R.K. Fashion Accessories’ March 19, 2026 bonus issue increased paid-up equity shares from 6,61,739 to 1,12,49,563 without cash consideration and underlies the nil WACC reported for recent promoter and promoter-group acquisitions. The transaction left control concentrated, with promoters and the promoter group holding 99.67% of pre-offer capital and Mohammed Usman and MD Qasim holding 99.57% together.

The next disclosed update is the red herring prospectus, which R.K. Fashion Accessories says will complete the promoter lock-in table after the basis of allotment is finalised. The company also says it will file the shareholding pattern one day before listing, while the unexplained 80-share difference in MD Qasim’s March 2026 bonus disclosures remains unresolved.