Sahana System Limited seeks Rs 125 crore warrant approval

Sahana System Limited is seeking shareholder approval to issue up to Rs 125 crore of convertible warrants, with Rs 50 crore earmarked for working capital and Rs 30 crore for subsidiary-led target investments. The November 5, 2026 corrigendum sets out 13,15,789 warrants at Rs 950 each and says full conversion would not change control.

What are shareholders being asked to approve?

Sahana System is asking shareholders to approve the preferential allotment of up to 13,15,789 fully convertible equity warrants at Rs 950 each to four identified non-promoter allottees. The November 5, 2026 corrigendum modifies the postal-ballot notice dated October 16, 2026, while all provisions not amended remain unchanged.

The issue could raise up to Rs 125 crore if all warrants convert into an equal number of equity shares within 18 months of allotment. Remote e-voting opened at 9 a.m. Indian Standard Time on October 17, 2026 and closes at 5 p.m. on November 15, 2026. Investors must pay 25% of the issue price on warrant allotment, with the balance payable on exercise and conversion.

How would Sahana System use the proposed proceeds?

Sahana System proposes to allocate Rs 50 crore, or 40% of gross proceeds, to working-capital requirements of the company and its direct and step-down subsidiaries. The company says management will decide the entity-wise allocation based on operational priorities, cash-flow position, business requirements and the availability of internal accruals.

The Rs 50 crore working-capital pool may be used for supplier and vendor payments, employee expenses, operating and administrative costs, trade payables, existing debt obligations and other short-term obligations. Sahana System says it will disclose the exact entity-wise deployment, inter-company fund flows and end use to stock exchanges, the monitoring agency and stakeholders.

What investments could the Rs 43.75 crore support?

Sahana System has earmarked Rs 13.75 crore for strategic equity investments in subsidiaries and/or other entities, but it has not named any investee company or target. The company says it may subscribe to shares or acquire shares, potentially to obtain control including voting rights, after considering strategic objectives, commercial viability, financial requirements and expected benefits.

A separate Rs 30 crore allocation would be provided as loans to subsidiaries, which could invest in target companies through fresh-share subscriptions, purchases of existing shares, or both. Sahana System says the target identity, valuation, ownership stake, investment amount and commercial terms will depend on due diligence, financial and commercial evaluation, applicable approvals and final transaction terms.

Sahana System has undertaken to disclose the target name, valuation, shareholding percentage and commercial terms when binding definitive documents are executed for a strategic investment or equity consolidation. For a downstream transaction, it says disclosures would also cover the business rationale, deal structure, fund-flow tranches and verifiable end use by the subsidiary.

How would the warrant conversion change ownership?

Sahana System says allotment and full conversion of the 13,15,789 warrants would not result in a change in control. All four proposed allottees are classified as non-promoters before and after the issue, while Magnanimous Trade & Finance Limited would have the largest individual post-conversion stake at 4.36%.

Under the illustrated full-conversion shareholding pattern, promoter and promoter-group ownership would fall to 50.31% from 57.31%, a reduction of 7 percentage points. Public and non-promoter ownership would increase to 49.69% from 42.69%, and the total number of shares would rise to 1,20,79,988 from 1,06,04,525.

The illustration also assumes conversion of 1,59,673 warrants allotted to 12 allottees on November 11, 2025 that remain pending conversion. Within public holdings, non-institutional ownership is shown increasing to 48.30% from 41.11%, while institutional ownership declines proportionately to 1.39% from 1.58% without any proposed institutional allotment.

How will Sahana System monitor and report fund use?

Sahana System says it will appoint a monitoring agency for the proposed issue and provide detailed object-wise, and where applicable entity-wise, utilisation disclosures. The undertaking covers fund use by Sahana System, its direct subsidiaries and its step-down subsidiaries, along with supporting documents and further information requested by the monitoring agency.

Each funding tranche, including the 25% payment received at warrant allotment and balance conversion money, is to be used for the stated objects within the disclosed timelines. The company says the utilisation schedules are estimates based on current planning, but each object remains subject to a maximum 24-month period from receipt of funds.

The Rs 31.25 crore general-corporate-purpose allocation includes issue expenses and ordinary-course operational and administrative expenses, and is capped at 25% of gross proceeds. Any shortfall or surplus in offer expenses will be adjusted against this allocation; if proceeds remain unused, the board may deploy them in subsequent periods in accordance with applicable law.

Conclusion

Sahana System’s amended proposal combines a Rs 50 crore working-capital allocation with Rs 43.75 crore for strategic and subsidiary-led investments, while reserving Rs 31.25 crore for general corporate purposes. The full-conversion illustration shows promoter holding at 50.31%, compared with 57.31% before the issue, although the company states that control would not change.

The next scheduled event is the postal-ballot voting deadline of November 15, 2026. If shareholders approve the proposal, the matters to watch are warrant allotment, receipt of exercise money over up to 18 months, deployment within 24 months of receipt, monitoring-agency disclosures, and filings that identify any investment or acquisition target.