Sobhagya Mercantile proposes 10-for-1 bonus share issue

Sobhagya Mercantile Limited proposed on November 13, 2026 a 10-for-1 bonus share issue that would raise paid-up equity capital to Rs 114.389 crore from Rs 10.399 crore, subject to member and other approvals. The proposal requires capitalisation of Rs 110.495 crore from audited retained earnings and securities premium.

What bonus issue has Sobhagya Mercantile proposed?

Sobhagya Mercantile has proposed 10 fully paid equity shares of Rs 10 each for every one fully paid equity share held on a record date yet to be announced. Its board considered, approved and recommended the 10:1 proposal at its November 13, 2026 meeting, subject to approval by members at an Extraordinary General Meeting, or EGM, and appropriate authorities.

The disclosed proposal covers 11.0495 crore equity shares with an aggregate face value of Rs 110.495 crore. That number includes bonus shares reserved for the holders of 6,50,500 outstanding convertible warrants, but those reserved shares would be allotted only if the warrants convert into equity shares under the applicable Securities and Exchange Board of India, or SEBI, regulations.

The bonus shares, once allotted, will rank pari passu with the existing equity shares, meaning they will carry the same rights. Sobhagya Mercantile said the new shares will participate fully in dividends and other corporate actions recommended and declared after their issue and allotment, while each share will continue to have a Rs 10 face value.

How would Sobhagya Mercantile's equity capital change?

Sobhagya Mercantile's paid-up equity capital would rise to Rs 114.389 crore from Rs 10.399 crore after the proposed issue, based on its current equity share capital. The corresponding number of equity shares would increase to 11.4389 crore from 1.0399 crore, which reflects the 10-for-1 ratio for existing paid-up equity shares.

The conditional third scenario assumes full conversion of the 6,50,500 warrants into equity shares and the subsequent bonus entitlement on those shares. The warrants were allotted on June 3, 2026, and the resulting capital of Rs 121.5445 crore is not the stated post-bonus position for existing shareholders alone.

How will Sobhagya Mercantile finance the bonus issue and increase capital?

Sobhagya Mercantile plans to fund the Rs 110.495 crore bonus issue through retained earnings and its securities premium account. The company reported aggregate retained earnings and securities premium of Rs 183.0959908 crore as of March 31, 2026, and said the balances used in the proposal were taken from audited financial statements.

The required Rs 110.495 crore capitalisation is lower than the Rs 183.0959908 crore aggregate balance reported for those two accounts at March 31, 2026. The filing identifies these reserves as the source of the bonus shares, rather than a new equity fundraising or an operating-cash-flow allocation.

Separately, Sobhagya Mercantile has proposed raising authorised share capital to Rs 150 crore from Rs 20 crore, also subject to member and relevant approvals. The proposed ceiling would comprise 15 crore equity shares of Rs 10 each, compared with the present authorised capacity of 2 crore shares, and would exceed the Rs 121.5445 crore conditional paid-up capital scenario.

When could Sobhagya Mercantile shareholders receive bonus shares?

Sobhagya Mercantile estimates that the bonus shares will be credited or dispatched on or before January 12, 2027, within two months of the board approval on November 13, 2026. This timetable is conditional on shareholder approval and other approvals, so it is an estimated completion date rather than an unconditional allotment date.

The company has called its EGM for Friday, December 11, 2026 at 11:30 a.m. through video conferencing or other audio-visual means. Members eligible to vote electronically will be determined as of December 4, 2026, and PDTS and Associates, Company Secretaries, has been appointed scrutiniser for remote e-voting and e-voting at the meeting.

December 4, 2026 is the voting cut-off date, not the bonus-share record date. Sobhagya Mercantile said it will intimate the record date separately, meaning entitlement to 10 additional shares for every one share will depend on holdings on that later date rather than eligibility to vote at the December 11 EGM.

What do the outstanding warrants mean for the bonus issue?

Sobhagya Mercantile will reserve bonus shares for the holders of 6,50,500 outstanding convertible warrants, using the same 10:1 proportion and terms that apply to existing shareholders. The reserved shares are not immediately issued to warrant holders because allotment will occur only upon conversion of the warrants into equity shares.

The filing's total of 11.0495 crore proposed bonus shares therefore includes both the entitlement connected to 1.0399 crore existing equity shares and the conditional reservation linked to the warrants. This distinguishes the stated post-bonus share count of 11.4389 crore from the 12.15445 crore share count that assumes full conversion and the associated bonus allotment.

Sobhagya Mercantile said the reserved shares would be allotted in accordance with the SEBI Issue of Capital and Disclosure Requirements regulations. The filing does not state whether or when the 6,50,500 warrants will convert, so the Rs 121.5445 crore conditional capital figure depends on an event that remains unresolved in the announcement.

Conclusion

Sobhagya Mercantile's proposed 10-for-1 issue would multiply the existing equity share count from 1.0399 crore to 11.4389 crore and capitalise Rs 110.495 crore from audited retained earnings and securities premium. The associated authorised-capital proposal would lift capacity from Rs 20 crore to Rs 150 crore, including room for the warrant-linked conditional scenario.

The next disclosed event is the December 11, 2026 EGM, where members will consider both the bonus issue and the authorised-capital increase. Investors should watch for the voting outcome, the separately announced record date, any other approvals and whether Sobhagya Mercantile meets its estimated January 12, 2027 share-credit or dispatch date.