Kizi Apparels promoters seek 30.75 lakh preferential warrants

Kizi Apparels’ promoters and promoter-group entities intend to subscribe for 30.75 lakh of the proposed 51.69 lakh convertible warrants at Rs 17.50 each, while their aggregate ownership is projected to move from 59.30% on 30 September 2026 to 59.36% after full conversion.

Who will subscribe to Kizi Apparels’ proposed warrants?

Kizi Apparels’ six named promoters and promoter-group entities plan to take 30.75 lakh warrants, or about 59.49% of the proposed 51.69 lakh warrants. The board approved the proposed preferential issue on 30 October 2026, subject to member and other required approvals. Each warrant may be converted into one fully paid equity share with a face value of Rs 10 within 18 months of allotment.

Abhishek Nathani, promoter and managing director, is slated to subscribe for 8.04 lakh warrants, the largest individual allocation among the six. Kiran Nathani, promoter and chief financial officer, is allocated 6 lakh warrants; Suchitra Nathani is allocated 5.01 lakh; and Raj Kumar Nathani, Raj Kumar Nathani & Sons HUF, and Abhishek Nathani and Sons HUF are each allocated 3.90 lakh warrants. The document says no other promoters, directors or key managerial personnel intend to subscribe.

The remaining 20.94 lakh warrants are proposed for 17 other named allottees in the offer list. The filing describes the proposed allocation as involving promoter/promoter-group and public categories, although its earlier description of the issue refers to proposed allottees in the promoter and promoter-group category. Kizi Apparels states that the transaction would not change its management or control or transfer ownership.

What are the terms and pricing of the Kizi Apparels warrant issue?

Kizi Apparels proposes to issue up to 51.69 lakh convertible warrants at Rs 17.50 each, including a Rs 7.50 premium over the Rs 10 face value, for total proceeds of up to Rs 9.04575 crore. The warrants are to be issued for cash on a preferential basis and can be converted into an equal number of equity shares within 18 months from the warrant allotment date.

The Rs 17.50 issue price is 7 paise above the stated Rs 17.43 floor price. That floor was the higher of the 90-trading-day volume-weighted average price, or VWAP, of Rs 17.43 and the 10-trading-day VWAP of Rs 15.27 on BSE Limited before the relevant date. The relevant date for the pricing was 30 October 2026, identified as 30 days before the extraordinary general meeting, or EGM.

Because the proposed issue exceeds 5% of Kizi Apparels’ post-issue share capital, the filing says the price was also supported by a valuation report under Regulation 166A of the Securities and Exchange Board of India, or SEBI, Issue of Capital and Disclosure Requirements regulations. The report was dated 2 November 2026 and issued by registered valuer Bhavin R. Patel. Kizi Apparels says the Rs 17.50 price is not less than the prescribed floor price.

How would full conversion affect Kizi Apparels’ ownership?

Kizi Apparels projects promoter and promoter-group holdings will rise by 30.75 lakh shares, from 60.03 lakh shares before the issue to 90.78 lakh shares after all 51.69 lakh warrants are converted. Their percentage ownership would nevertheless change only marginally, increasing 0.06 percentage points from 59.30% to 59.36%, because the overall share count would also rise.

The filing assumes the total outstanding shares will increase from 101.23 lakh to 152.92 lakh after full conversion. Public shareholding is projected to increase by 20.94 lakh shares, from 41.20 lakh to 62.14 lakh, while its percentage falls from 40.70% to 40.64%. This comparison reflects the proposed allotment of 30.75 lakh warrants to the promoter group and 20.94 lakh to other proposed allottees.

The projected pattern is conditional rather than an immediate post-allotment result. Kizi Apparels says it assumes every proposed allottee subscribes for and is allotted the equity shares on warrant conversion, with all other shareholder categories unchanged. If any allottee does not convert or is not allotted shares, the post-issue ownership pattern would change accordingly.

How does Kizi Apparels plan to use the proceeds and complete the issue?

Kizi Apparels intends to allocate Rs 7.2366 crore, or 80% of the planned Rs 9.04575 crore proceeds, to working-capital requirements. It earmarks Rs 1.80915 crore, or 20%, for general corporate purposes, including ongoing corporate exigencies, contingencies and expenses as determined by the board. Management expects to use the proceeds in phases according to business requirements and fund availability.

Kizi Apparels estimates that each of these uses will occur within 12 months from receipt of warrant funds. Since conversions can occur in tranches over 18 months, Kizi Apparels says the timing and amount received may vary across dates. The issue does not create a charge on company assets, and equity shares issued on conversion will rank pari passu with existing equity shares.

Subject to the special resolution, Kizi Apparels says warrant allotment must be completed within 15 days of member approval under the SEBI regulations. If regulatory permission remains pending, the 15-day period runs from receipt of the last required approval. On a holder’s conversion request within the 18-month exercise period, the related equity shares are to be allotted within 15 days of that request.

Conclusion

The proposed transaction would place 30.75 lakh of Kizi Apparels’ 51.69 lakh warrants with its promoters and promoter group at Rs 17.50 each. On the filing’s full-conversion assumption, promoter-group ownership rises by 30.75 lakh shares but remains broadly steady as a proportion of capital at 59.36%, compared with 59.30% before the issue.

The next event to watch is the member vote required for the preferential issue, followed by warrant allotment within the stated 15-day regulatory timetable. Holders then have up to 18 months to convert, while Kizi Apparels plans to deploy the funds in phases, with Rs 7.2366 crore designated for working capital and Rs 1.80915 crore for general corporate purposes within 12 months of receiving funds.