The Company Promoters Retain 73.49% After IPO Share Sale

The Company’s two promoters will retain 73.49% of post-offer equity after selling 9.96 lakh shares in the offer for sale. They are expected to own 1,40,03,700 shares after the IPO, while a 40.56 lakh-share fresh issue raises total paid-up equity from 1,50,00,000 to 1,90,56,000 shares, assuming full subscription.

How will The Company’s promoter ownership change after the IPO?

The Company’s promoters will hold 73.49% after the IPO, compared with 99.99% before the offer. Naynesh Kanubhai Patel and Maheshkumar Gopalbhai Patel will collectively hold 1,40,03,700 shares after the offer, down from 1,49,99,700 shares before it, according to the stated post-offer shareholding pattern.

Naynesh Kanubhai Patel is expected to own 70,01,880 shares, or 36.74% of post-offer capital, after selling 4,98,000 shares. Maheshkumar Gopalbhai Patel is expected to own 70,01,820 shares, also stated as 36.74%, after selling 4,98,000 shares. Before the offer, each promoter owned 49.99% of the 1,50,00,000 pre-offer shares.

The five other promoter-group members will collectively continue to hold 300 shares after the offer, with 60 shares each. The Company describes that holding as negligible, so the disclosed 73.49% post-offer promoter and promoter-group stake is almost entirely held by the two promoters.

Why will The Company promoters retain 73.49% after the IPO share sale?

The Company’s promoters retain 73.49% because they will sell only 9.96 lakh of their 1,49,99,700 pre-offer shares. Their remaining 1,40,03,700 shares represent nearly three-fourths of the stated post-offer total of 1,90,56,000 shares, subject to finalisation of the basis of allotment.

The 40.56 lakh-share fresh issue changes the percentage calculation by expanding the number of outstanding shares. A fresh issue creates additional equity shares, whereas the 9.96 lakh-share offer for sale transfers existing promoter-held shares. Without the fresh issue, the promoters’ remaining 1,40,03,700 shares would be measured against the 1,50,00,000 pre-offer share base rather than the enlarged post-offer capital.

The fresh issue therefore dilutes the promoters’ percentage holding in addition to the reduction caused by their sale. The Company’s stated capital structure assumes full subscription: issued, subscribed and paid-up equity capital rises by 40.56 lakh shares, from 1,50,00,000 shares before the offer to 1,90,56,000 shares after it.

The Company has only one class of equity shares, each with a face value of Rs 10. It also reports no partly paid-up shares, preference shares or outstanding convertible instruments, meaning the disclosed post-offer ownership percentages are not accompanied by a stated pool of warrants, employee options or convertibles.

What proportion of The Company’s IPO is fresh issue and offer for sale?

The Company’s 50.52 lakh-share offer consists of a 40.56 lakh-share fresh issue and a 9.96 lakh-share offer for sale by the two promoters. The fresh issue accounts for about 80.28% of offered shares, while the offer for sale accounts for about 19.72%, based on the stated share counts.

At face value, the fresh issue represents Rs 4 crore 5.60 lakh and the offer for sale represents Rs 99.60 lakh. The capital-structure table leaves the offer-price aggregates blank pending finalisation of the offer price and basis of allotment, so the supplied information does not state the monetary value of either component at the final offer price.

The board authorised the offer through a resolution dated September 16, 2025, and shareholders approved the fresh issue through a special resolution dated September 17, 2025. The board also took on record each promoter’s consent dated September 16, 2025 to sell up to 4,98,000 shares through the offer for sale.

Of the 50.52 lakh offered shares, 2.532 lakh shares are reserved for the market maker and 47.988 lakh shares form the net offer to the public. Spread X Securities Private Limited is named as market maker on the BSE SME Platform, where it must provide two-way quotes for 75% of the trading day for a compulsory minimum period of three years from listing.

How did The Company reach its 1,50,00,000 pre-offer shares?

The Company reached 1,50,00,000 pre-offer shares through initial subscriptions, a rights issue, a loan conversion and a 5:1 bonus issue. It started with 10,000 shares on May 18, 2021, when Naynesh Kanubhai Patel and Maheshkumar Gopalbhai Patel each received 5,000 shares at Rs 10 per share.

On August 5, 2023, The Company allotted 19.90 lakh shares in a rights issue, split equally at 9.95 lakh shares for each promoter at Rs 10 per share. On March 14, 2024, it allotted 5 lakh shares through conversion of a loan into equity, with 2.50 lakh shares issued to each promoter at Rs 80 per share. That allotment generated cumulative share premium of Rs 3.50 crore.

The largest increase occurred on September 20, 2025, when The Company allotted 1.25 crore shares through a bonus issue in the ratio of five shares for every one share held. The two promoters received 62,49,900 and 62,49,850 bonus shares respectively, while five promoter-group members received 50 shares each.

Five transfers of 10 shares each took place on February 20, 2025 at Rs 80 per share. Naynesh Kanubhai Patel transferred 20 shares and Maheshkumar Gopalbhai Patel transferred 30 shares to promoter-group members, leaving the promoters with 1,49,99,700 shares rather than all 1,50,00,000 pre-offer shares.

What lock-in restrictions will apply to The Company promoter shares?

The Company states that its promoters will contribute at least 20.00% of fully diluted post-offer equity capital as minimum promoters’ contribution. Under the disclosed Securities and Exchange Board of India (SEBI) Issue of Capital and Disclosure Requirements Regulations, 2018, those shares will be locked in for three years from IPO allotment.

A lock-in restricts transferability for the stated period. The specific table identifying the promoters’ locked-in share numbers and lock-in end dates remains blank in the red herring prospectus and is marked for update in the prospectus, so the supplied material does not identify the exact shares forming the minimum contribution.

Promoter holdings above the minimum contribution face further restrictions under the disclosed framework. Fifty percent of the excess promoter holding will be locked in for two years from allotment and the remaining 50% for one year. The Company also states that none of the pre-offer shares held by promoters or the promoter group were pledged as of the red herring prospectus date.

Conclusion

The Company’s IPO combines a limited promoter sell-down with a larger fresh issue, leaving the two promoters with 1,40,03,700 shares and the promoter group with 1,40,04,000 shares. The resulting 73.49% stake is lower than the 100.00% promoter-group ownership before the offer, but it maintains concentrated ownership after the 40.56 lakh new shares expand the equity base.

The next ownership information to watch is the final prospectus update to the minimum promoters’ contribution lock-in table and the basis of allotment. The Company also states that it will file its prescribed shareholding pattern one day before listing, which should set out the reported ownership distribution before trading begins.