Milkfood Ltd Allots 22 Lakh Shares After Warrant Conversion

Milkfood Limited has allotted 22 lakh equity shares of face value ₹5 each after the conversion of preferential warrants, taking its paid-up share capital to ₹13.89809 crore. The board approved the allotment on October 30, 2026, completing the conversion of warrants issued at ₹30 each to two non-promoter public investors.

Why did Milkfood Ltd allot 22 lakh equity shares?

Milkfood Ltd allotted the shares after the holders converted 22 lakh warrants issued through a preferential allotment. The warrants had been issued to Sudhir Avasthi and Deepankar Barat, who were classified as non-promoter public investors in the allotment details. Each investor received 11 lakh warrants, and each warrant entitled the holder to one equity share upon full payment of the issue price.

The board approved the equity-share allotment on October 30, 2026. The newly allotted shares rank pari passu with Milkfood Ltd's existing equity shares, meaning they carry the same rights as the existing shares. The conversion increased the company's paid-up equity share capital to ₹13.89809 crore.

How did the preferential warrant issue move to conversion?

The preferential issue began after shareholders approved the proposal at an extraordinary general meeting held on July 27, 2026. The special resolution received 17.58 million votes in favour, representing 99.99% of the votes cast, while 239 votes were cast against the proposal.

On September 7, 2026, Milkfood Ltd's board allotted 22 lakh convertible warrants at ₹30 per warrant. The allottees initially paid ₹7.50 per warrant, equivalent to 25% of the issue price, and the remaining 75% was payable for conversion. The warrants were convertible on a one-to-one basis into equity shares within 18 months of allotment, subject to the payment terms and applicable regulations.

The issue was intended to raise ₹6.60 crore for working capital. At the initial warrant-allotment stage, Milkfood Ltd received ₹1.65 crore, while its paid-up share capital did not change because warrants are not equity shares until converted. The October 30 allotment reflects the completed conversion into equity.

What are the key figures in Milkfood Ltd's allotment?

Milkfood Ltd converted all 22 lakh warrants into equity shares at the previously approved issue price of ₹30 per warrant. The transaction increased the number of shares outstanding, while the full preferential issue represented a potential ₹6.60 crore capital raising.

The warrant issue had received prior in-principle approval from BSE, according to the company disclosures. The securities were also subject to lock-in requirements prescribed under Chapter V of the SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018.

How does the allotment affect Milkfood Ltd shareholders?

The allotment dilutes the ownership percentage of existing shareholders because 22 lakh new equity shares have been added to the outstanding share base. Dilution does not change the number of shares held by existing investors, but it lowers their percentage ownership in the company after the additional shares are issued.

Milkfood Ltd's shareholding data as of September 2026 showed promoter ownership at 54.04% and public ownership at 45.92%. The company also reported promoter holding of about 54% and public holding of 45.9% as of October 27, 2026. The actual post-allotment ownership percentages will depend on the updated shareholding pattern filed after the new shares are reflected.

The conversion also turns the two allottees from warrant holders into equity shareholders. As equity holders, their allotted shares rank equally with the existing shares, rather than remaining contingent instruments awaiting conversion.

What is the financial and regulatory context for the issue?

Milkfood Ltd stated on October 26, 2026, that there was no deviation in the use of proceeds from the 22 lakh warrant issue. The disclosure was made alongside its unaudited financial results for the quarter and half year ended September 30, 2026.

For the first half of FY2026-27, the company reported revenue of ₹182.36 crore and net profit of ₹1.53 crore. The proceeds from the preferential issue were earmarked for working capital, and the company had earlier confirmed receipt of the required 25% upfront subscription amount when it allotted the warrants.

The transaction illustrates the distinction between warrant allotment and equity issuance. A warrant allotment can provide a company with an upfront payment and a possible future capital inflow, but paid-up capital rises only after the warrants are converted into shares. In this case, the conversion has now resulted in an immediate increase in Milkfood Ltd's equity base.

Conclusion

Milkfood Ltd's allotment of 22 lakh shares completes the conversion of the preferential warrants issued in September 2026. The move increases paid-up capital to ₹13.89809 crore, brings the allottees into the equity shareholding base and dilutes the percentage ownership of shareholders who held shares before the conversion.

Investors can watch for Milkfood Ltd's updated post-allotment shareholding pattern and further disclosures on the use of the preferential-issue proceeds for the stated working-capital purpose. The company had reported no deviation in the use of warrant proceeds as of its October 26, 2026 disclosure.