Sobhagya Mercantile plans Rs 150 crore authorised capital

Sobhagya Mercantile Limited proposes increasing authorised share capital to Rs 150 crore from Rs 20 crore, a Rs 130 crore increase approved by its board on November 13, 2026, subject to member and other approvals. The additional capacity would support a proposed 10:1 bonus issue and possible bonus entitlement on 6.505 lakh outstanding convertible warrants.

Why is Sobhagya Mercantile increasing authorised share capital?

Sobhagya Mercantile is seeking to raise its authorised share capital from Rs 20 crore to Rs 150 crore to accommodate its proposed bonus issue and amend the capital clause in its Memorandum of Association. The board approved the proposal at its November 13, 2026 meeting, but the change remains subject to approval by members at an Extra Ordinary General Meeting and by appropriate authorities.

The existing authorised capital is divided into 2 crore equity shares with a face value of Rs 10 each, while the proposed capital would be divided into 15 crore equity shares of Rs 10 each. That would add capacity for 13 crore shares and lift the monetary ceiling by Rs 130 crore. Authorised capital is the maximum share capital the company may issue under its constitutional documents, rather than the amount of equity already issued and paid up.

The proposed revised capital clause says Sobhagya Mercantile would have the power to increase or reduce capital, divide it into other classes, and attach preferential, deferred, qualified or other rights, subject to its Articles of Association and applicable law. The November 13 announcement does not disclose a separate fundraising plan or a fresh cash equity issue beyond the proposed bonus issue and the warrant-related share reservation.

How does the bonus issue fit within the proposed limit?

Sobhagya Mercantile has recommended issuing 10 fully paid equity shares of Rs 10 each for every one fully paid share held on a record date that has not yet been announced. The company disclosed 11.0495 crore proposed bonus shares with a stated capitalisation value of Rs 110.495 crore, conditional on shareholder approval and other required approvals.

Before the proposed bonus issue, paid-up equity capital is Rs 10.399 crore across 1.0399 crore shares. After the issue, paid-up capital would rise to Rs 114.389 crore across 11.4389 crore shares. The proposed Rs 150 crore authorised limit would therefore be Rs 35.611 crore above the stated post-bonus paid-up capital.

Sobhagya Mercantile also reported 6.505 lakh outstanding convertible warrants. It proposes to reserve bonus shares for warrant holders in the same 10:1 proportion, but those shares would be allotted only upon conversion of the warrants into equity shares under applicable Securities and Exchange Board of India regulations. On the company’s stated assumption of full warrant conversion and the related bonus allotment, paid-up capital would be Rs 121.5445 crore, leaving Rs 28.4555 crore below the proposed authorised ceiling.

What reserves would fund Sobhagya Mercantile's bonus issue?

Sobhagya Mercantile said it would issue the bonus shares from retained earnings and its securities premium account available as of March 31, 2026. The company reported an aggregate Rs 183.0959908 crore in those two accounts at that date, compared with Rs 110.495 crore required for the stated bonus issue.

The disclosed balance exceeds the required capitalisation amount by Rs 72.6009908 crore. Sobhagya Mercantile said the reserve and premium figures are based on audited financial statements. The proposed transaction would capitalise existing retained earnings and securities premium rather than require shareholders to pay cash for the bonus shares.

The 10:1 ratio would give a qualifying holder 10 additional shares for each one fully paid share held on the record date. Sobhagya Mercantile said the allotted bonus shares would rank pari passu with existing shares, carrying the same rights and participating fully in dividends and corporate actions recommended and declared after their issue and allotment.

The filing does not state the eventual record date, which will determine the shareholders eligible for the 10:1 entitlement. It also does not state a final number of bonus shares reserved for the 6.505 lakh warrants, because the reserve and allotment depend on the warrants being converted into equity shares.

When will Sobhagya Mercantile shareholders vote on the proposals?

Sobhagya Mercantile has called an Extra Ordinary General Meeting for Friday, December 11, 2026, at 11:30 a.m. through video conferencing or other audio-visual means. The meeting will address the proposed Rs 150 crore authorised-capital limit, the related Memorandum of Association amendment and the 10:1 bonus issue.

The company set December 4, 2026 as the cut-off date for determining members eligible to vote electronically at the meeting. PDTS and Associates, Company Secretaries, has been appointed scrutiniser for remote electronic voting and voting during the meeting. The board meeting that approved the proposals commenced at 4:00 p.m. and concluded at 8:30 p.m. on November 13, 2026.

Subject to shareholder and other approvals, Sobhagya Mercantile expects the bonus shares to be credited or dispatched within two months of the board approval date. The stated completion date is on or before January 12, 2027. That timing remains conditional on the December 11 vote, other approvals and the separate communication of the record date.

The same November 13, 2026 board meeting approved unaudited standalone and consolidated results for the quarter and half year ended September 30, 2026, along with limited review reports. However, the supplied announcement provides no revenue, profit, loss, cash-flow or balance-sheet figures from those results, so it does not quantify any operating financial effect from the capital proposals.

What changes if all outstanding warrants are converted?

Sobhagya Mercantile’s disclosed post-bonus share count would increase from 11.4389 crore shares to 12.15445 crore shares if all 6.505 lakh warrants were converted and the linked bonus shares were allotted. The difference of 0.71555 crore shares reflects the 6.505 lakh converted warrant shares plus their 10:1 bonus entitlement.

Under that full-conversion illustration, paid-up capital would rise from Rs 114.389 crore after the base bonus issue to Rs 121.5445 crore. This remains within the proposed Rs 150 crore authorised capital, but the filing does not disclose whether or when any holder will convert warrants. The company also does not provide warrant conversion terms in this announcement.

The source describes a reserve for bonus shares connected to the warrants, not an automatic allotment to warrant holders. The relevant mechanism is conversion first, followed by the bonus-share allotment in the same proportion and on the same terms as applicable to existing shareholders, in accordance with the applicable regulations.

Conclusion

The proposed increase from Rs 20 crore to Rs 150 crore would give Sobhagya Mercantile sufficient authorised equity capacity for its stated 10:1 bonus issue of 11.0495 crore shares and for the additional shares that could arise from 6.505 lakh outstanding convertible warrants. The plan would raise paid-up capital from Rs 10.399 crore to Rs 114.389 crore before any assumed warrant conversion.

The next disclosed steps are the December 4, 2026 voting cut-off and the December 11, 2026 Extra Ordinary General Meeting. Investors should watch for the vote outcome, the separately announced bonus record date, any warrant conversions and whether Sobhagya Mercantile completes the credit or dispatch of bonus shares by January 12, 2027.