Shree Rajeshwaranand Paper Mills approves ₹12 cr issue

Preferential issue cleared as part of resolution plan

Shree Rajeshwaranand Paper Mills Limited has approved a preferential allotment of equity shares worth ₹12 crore on August 21, 2026. The decision was taken by the company’s Board as part of a court-approved resolution plan. The stated purpose is to restructure the company’s capital after completion of the Corporate Insolvency Resolution Process (CIRP). The allotment is positioned as an equity infusion step required under the plan. The company said the transaction is effective by virtue of the National Company Law Tribunal (NCLT) order and requires no further instruments.

What the board approved on August 21, 2026

The Board authorised the issuance of 1,20,00,000 equity shares. Each share carries a face value of ₹10. The company linked this issuance to the equity infusion requirement mandated by NCLT, Ahmedabad. The NCLT had approved the resolution plan earlier, on November 27, 2024. The latest approval aligns the company’s capital structure with the resolution plan’s implementation steps following CIRP.

How the shareholding changes after allotment

The company disclosed that post-allotment, new investors and their affiliates will hold about 94.81% of the capital. Existing shareholders will retain a 5% stake. This is a sharp shift in ownership and indicates the resolution applicant group’s control over the post-CIRP entity. Such dilution is consistent with resolution plans where incoming investors infuse fresh equity and take majority ownership.

Allotment breakdown: investors, shares, and ownership

The company provided a list of allottees, shares allotted, amounts, and post-allotment percentages. The amounts were disclosed in absolute rupee terms and are presented below in ₹ crore for comparability.

Regulatory steps: BSE listing approval and compliance

Alongside the allotment approval, the Board also cleared an application to the Bombay Stock Exchange (BSE) for in-principle approval to list the newly issued equity shares. The company indicated it will comply with the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, and the Companies Act, 2013. The company also noted that the allotment is effective by virtue of the NCLT order, implying the court order provides the legal basis for implementation.

Link to the NCLT-approved CIRP resolution

The preferential issue is tied to the resolution plan approved by the NCLT, Ahmedabad bench, on November 27, 2024. The article also refers to the plan submitted by Mercury Terra Firma (the resolution applicant) for Shree Rajeshwaranand Paper Mills, described as an Ahmedabad-based BSE-listed manufacturer of paper and paper products. The plan had earlier been approved by the Committee of Creditors (CoC) with a 97.36% vote share. The liquidation value was stated at ₹33.16 crore and the fair value at ₹45.85 crore.

What the resolution plan promised to creditors

Under the plan, Mercury Terra Firma promised payments to different creditor classes against admitted claims. Secured financial creditors were to receive ₹39.35 crore against admitted claims of ₹72 crore. Unsecured creditors were to receive ₹0.50 crore against admitted claims of ₹4.68 crore. Operational creditors (including statutory and employee dues) were provided ₹0.67 crore against admitted claims of around ₹24 crore. The plan also set aside ₹7 crore for working capital needs and ₹0.65 crore for CIRP cost.

Funding mix and payment schedule disclosed earlier

The source of funds in the plan included ₹10 crore to be infused through subscription of equity shares. Another ₹31 crore was to be raised through unsecured loans from banks, associates, friends and relatives, as disclosed. The payment schedule mentioned that ₹11 crore would be paid within a month of NCLT approval, another ₹10 crore within two months, and the rest ₹20 crore within three months. Against that backdrop, the ₹12 crore preferential allotment approved on August 21, 2026 represents a concrete equity issuance step following NCLT approval.

Market and disclosure context available in the release

The company also disclosed the publication of its audited financial results for the fourth quarter and financial year ended March 31, 2026. Separately, the article included a market snapshot showing a current price of ₹1.71, a 52-week high/low of ₹4.07 / ₹1.33, and a market capitalisation of ₹2.13 crore, along with other displayed metrics such as P/E ratio (-3.42) and face value (₹10). These figures provide context around the stock’s trading level around the time the corporate actions and resolution-related disclosures were being tracked.

Why this development matters for shareholders

For existing shareholders, the primary implication is dilution to a residual stake of 5% after the preferential allotment, as stated. For the incoming investor group, the allotment results in effective control with 94.81% ownership. From a compliance standpoint, the next procedural milestone disclosed is obtaining BSE’s in-principle listing approval for the new shares and completing listing-related formalities under applicable regulations.

Conclusion and what to watch next

Shree Rajeshwaranand Paper Mills’ ₹12 crore preferential allotment approved on August 21, 2026 is a key step in implementing the NCLT-approved resolution plan following CIRP. The company has also initiated the process for listing the newly issued shares on BSE through an in-principle approval application. Investors will track exchange approvals and subsequent disclosures as the company completes the post-allotment listing process and continues reporting under the restructured capital base.