Mihika promoter stake may dilute in Rs 90 crore rights issue

Mihika Industries Limited said its promoter, Veggie Fest Foods Private Limited, may not fully subscribe to its rights entitlement or may renounce it on-market, creating potential dilution from its 47.14% holding in a rights issue of up to Rs 90 crore. The offer comprises up to 9 crore rights equity shares priced at Rs 10 each.

Will Mihika’s promoter subscribe to the rights issue?

Mihika said Veggie Fest Foods may not subscribe to its rights entitlement in full and may consider renouncing those rights on the stock-exchange platform. The promoter communicated that position in an independent letter dated July 17, 2026. Mihika also disclosed that Veggie Fest Foods may not apply for additional equity shares beyond its entitlement if it makes any subscription.

Veggie Fest Foods held 47,14,190 equity shares, equal to 47.14% of Mihika, as of the Letter of Offer, with no shares reported as pledged. Mihika said that non-subscription by the promoter could modify its shareholding. The company also stated that the issue would not result in a change in management control under the Securities and Exchange Board of India takeover regulations.

The potential percentage dilution reflects the scale of the proposed issue. Mihika had 1 crore issued, subscribed and paid-up equity shares before the issue and proposes up to 9 crore new shares. The final promoter holding will depend on Veggie Fest Foods’ eventual application, any rights renunciation, participation by other holders and the basis of allotment, none of which has been finalised.

How concentrated is Mihika’s current ownership?

Mihika’s disclosed ownership was led by Veggie Fest Foods at 47.14% as of September 30, 2026, while Patriotic Tradelink Private Limited was the next-largest disclosed holder above 1%, at 4.14%. The 43-percentage-point difference means the promoter’s decision on the rights issue can materially alter the ownership mix even though Mihika has said control will not change.

Other disclosed shareholders holding more than 1% included Saptswati Private Limited at 2.64%, Tarunkumar Ganpatbhai Makwana at 2.59%, Yellow Bricks Gold Empier Private Limited at 2.40% and Bhimabhai Jalandhar Thakor at 2.32%. These are pre-issue positions, and Mihika did not disclose how these holders will use their rights entitlements.

Mihika said Veggie Fest Foods had not acquired any equity shares during the year before the Letter of Offer filing. The company also reported no outstanding warrants, options, convertible loans, debentures or other instruments convertible into equity shares. Therefore, the disclosed ownership change relates to the proposed rights issue rather than conversion of existing securities.

How will Mihika’s rights issue expand its share capital?

Mihika proposes to issue up to 9 crore rights equity shares at Rs 10 each, with no premium, for gross proceeds of up to Rs 90 crore. Subject to full subscription, allotment and payment of all call monies, issued, subscribed and paid-up capital would rise from 1 crore equity shares to 10 crore equity shares.

Applicants must pay Rs 2.50 per rights share at application, representing 25% of the Rs 10 issue price. The remaining Rs 7.50 per share, or 75%, will be payable through three later calls. Mihika’s board will decide the number, timing and amount of those calls, according to the payment terms approved on November 2, 2026.

Mihika calculated an ex-rights price of Rs 10.18 using the formula prescribed under the takeover regulations. It said promoter acquisitions in the issue could be eligible for an open-offer exemption if pricing and other regulatory conditions are met. Mihika also said it complies with the minimum public shareholding requirement and will continue to do so after the issue.

When must Mihika shareholders act on their rights entitlements?

Mihika’s rights issue is scheduled to open on November 19, 2026 and close on December 4, 2026, with December 1, 2026 set as the last date for on-market renunciation of rights entitlements. The last date for credit of rights entitlements is November 9, 2026. Mihika said the timetable is indicative and could change if the issue period is extended or final listing and trading approval is delayed.

Off-market renunciations must be completed by the December 4 closing date. Mihika said entitlements for which no application is made by that date will lapse and be extinguished. A buyer who acquires a rights entitlement in the market but does not apply for the underlying shares will receive no shares and may lose the premium paid to buy that entitlement.

Mihika expects to finalise the basis of allotment and make allotments on or about December 7, 2026. Credit of allotted shares and listing or trading are both scheduled on or about December 8, 2026. Physical shareholders without demat account details were asked to provide them by December 1, 2026 to enable credit of entitlements.

What does Mihika plan to do with the rights issue proceeds?

Mihika plans to use net proceeds of up to Rs 89.20 crore, assuming full subscription, with up to Rs 80.65 crore allocated to existing and incremental working-capital needs and up to Rs 8.55 crore to general corporate purposes. The estimate deducts issue expenses of up to Rs 80 lakh from gross proceeds of up to Rs 90 crore. Mihika plans to deploy the full net proceeds in fiscal 2027.

Management said the working-capital requirement arises primarily from agricultural-commodity procurement, inventory, receivables and payments to farmers, suppliers, traders and other procurement partners. Mihika expects a working-capital gap of Rs 83.6105 crore at March 31, 2027, compared with Rs 3.8823 crore at March 31, 2026, based on its internal estimates.

The company said the funding requirements and deployment plan have not been appraised by a bank, financial institution or independent agency. Mihika’s board or Rights Issue Committee may revise the timing, method and allocation of proceeds for business requirements and commercial considerations, subject to applicable law. General corporate purposes alone cannot exceed 25% of gross proceeds.

Conclusion

Mihika’s filing shows that Veggie Fest Foods’ 47.14% stake is not assured to remain at that level because the promoter may partly forgo or sell its rights entitlement. That ownership uncertainty accompanies an issue that could increase Mihika’s equity share count from 1 crore to 10 crore shares and raise up to Rs 90 crore, subject to subscription and allotment.

The next disclosed milestones are the November 19, 2026 opening, the December 1, 2026 deadline for on-market renunciation and the December 4, 2026 issue closing. Investors will also need to watch subscription and allotment results because Mihika’s planned Rs 80.65 crore working-capital allocation assumes full subscription, while management retains discretion to revise the deployment schedule and allocations.