Shreeji Global FMCG proposes 1:1 bonus with warrant reserve

Shreeji Global FMCG Limited has proposed a 1:1 bonus issue that would capitalise up to Rs 24.96228 crore, including Rs 2.20228 crore reserved for bonus shares when proposed preferential warrants convert into equity shares. The board approved the proposal on October 27, 2026, subject to member, regulatory and other required approvals.

What has Shreeji Global FMCG proposed for existing shareholders?

Shreeji Global FMCG has proposed one new fully paid-up equity share with a face value of Rs 10 for every one existing fully paid-up equity share held on a record date yet to be determined by the board. The board approved and recommended the proposal on October 27, 2026, subject to members approving an ordinary resolution.

The proposal covers 227.60 lakh existing paid-up equity shares cited in the notice. Shreeji Global FMCG would capitalise Rs 22.76 crore for bonus shares on those existing shares, with the new shares ranking pari passu, or equally in rights, with existing equity shares. The record date will determine eligible registered members and beneficial owners.

The maximum capitalisation of Rs 24.96228 crore may be drawn from the securities premium account, general reserves, or other permitted free reserves and surplus, as determined by the board. Audited financial statements for the year ended March 31, 2026 showed reserves and surplus of Rs 109.270912724 crore, which the notice says is sufficient for the proposed capitalisation.

The bonus issue will require shareholder approval under Section 63 of the Companies Act, 2013, as well as any statutory or regulatory consents required. Shreeji Global FMCG also said its decision to issue bonus shares cannot be withdrawn once announced, while the record date remains to be fixed by the board.

How will the proposal change Shreeji Global FMCG's share capital?

Shreeji Global FMCG proposes to increase authorised equity share capital to Rs 50 crore from Rs 23 crore. The authorised number of equity shares of Rs 10 each would rise to 500 lakh from 230 lakh, requiring member approval and an amendment to Clause V, the capital clause, of its memorandum of association.

The proposed increase adds capacity for 270 lakh authorised shares, compared with the existing 230 lakh-share limit. The notice describes the capital increase as necessary in view of the company’s requirements and future business prospects, while the bonus resolution separately concerns capitalisation of reserves.

The Rs 22.76 crore component applies to current equity shareholders, whereas Rs 2.20228 crore is reserved for bonus shares associated with potential warrant conversion. The notice makes clear that the latter is not an immediate allotment because warrant holders have no entitlement to bonus shares until their warrants convert into equity shares.

For shareholders holding physical shares on the record date, Shreeji Global FMCG said the new bonus shares would be credited to a dematerialised, or demat, escrow account until required documents are received. Voting rights on those shares would remain frozen during that period, and all bonus shares will be issued only in demat form.

Why would Shreeji Global FMCG reserve bonus shares for warrant conversions?

Shreeji Global FMCG proposes to give each warrant holder one bonus share for every equity share issued on conversion of a warrant, matching the 1:1 ratio offered to existing shareholders. This entitlement remains subject to shareholder, stock exchange and other regulatory approvals, as well as compliance with Securities and Exchange Board of India regulations.

The company proposes to issue up to 22.0228 lakh convertible warrants at Rs 185 each, for aggregate proceeds of up to Rs 40.74218 crore. The issue price comprises Rs 10 face value and Rs 175 premium and was set on a pre-bonus basis. Assuming full conversion and the related bonus allotment, an allottee would receive two equity shares for each Rs 185 warrant.

If a warrant is not converted or lapses, the associated part of the Rs 2.20228 crore reserve will be released and returned to the reserve from which it was set aside. This means the warrant-linked bonus shares are conditional on conversion rather than rights attached to outstanding warrants.

The Rs 185 warrant price exceeded the Rs 180.92 floor price and the Rs 182.40 value determined by a registered valuer. The notice cites a 90-trading-day volume-weighted average price, or VWAP, of Rs 175.45 and a 10-trading-day VWAP of Rs 180.92 before the relevant date of October 27, 2026.

What funding and ownership effects does Shreeji Global FMCG disclose?

Shreeji Global FMCG proposes to deploy up to Rs 40.74218 crore of warrant proceeds toward working capital and general corporate purposes. Management estimates that Rs 32.593744 crore would go to working-capital requirements and Rs 8.148436 crore to general corporate purposes, with use planned within 12 months of receiving warrant funds.

The warrants may be issued in one or more tranches, and the notice says proceeds must be received within 18 months of allotment under the Securities and Exchange Board of India Issue of Capital and Disclosure Requirements regulations. Pending deployment, the company may temporarily invest unutilised proceeds in deposits with scheduled commercial banks or other legally permitted safe and liquid instruments.

The disclosed ownership comparison is between September 30, 2026 and a post-issue scenario assuming full warrant conversion, but before the bonus issue. Promoter and promoter-group holdings would rise to 174.62 lakh shares from 159.5972 lakh shares, while their ownership percentage would decline to 69.95% from 70.12%.

The promoter and promoter-group percentage would therefore fall by 0.17 percentage points despite an increase of 15.0228 lakh shares under the stated full-conversion assumption. The preferential issue requires a special resolution, while the bonus issue and authorised-capital increase require ordinary resolutions; the supplied notice pages do not identify individual warrant allottees.

Conclusion

Shreeji Global FMCG’s proposal combines a 1:1 bonus issue for existing shareholders with a conditional matching bonus entitlement for equity shares created through warrant conversion. The Rs 24.96228 crore maximum capitalisation consists of Rs 22.76 crore for the existing 227.60 lakh paid-up shares and Rs 2.20228 crore reserved for up to 22.0228 lakh converted warrants.

The next disclosed milestones are member votes on the ordinary resolutions for the authorised-capital increase and bonus issue, the special resolution for the preferential warrants, and the board’s decision on a record date. If warrants are allotted, proceeds are due within 18 months of allotment and management estimates their use within 12 months of receipt.