Touchwood redirects warrant proceeds, forfeits Rs 5.10 crore

Touchwood Entertainment Limited said in its statement for the quarter ended September 30, 2026 that it had redirected Rs 14.28 crore from its February 2023 preferential warrant issue under shareholder-approved revised objects, while Rs 5.10 crore paid upfront on 20 lakh warrants was forfeited after their August 31, 2024 exercise deadline.

Why did Touchwood change the use of warrant proceeds?

Touchwood changed the objects of its preferential issue after shareholders approved the revision on September 29, 2023. The original object was to fund capital requirements for growth and expansion of Touchwood’s subsidiary companies, along with other purposes decided and approved by the board. The filing says the variation related to the objects in an explanatory statement dated September 1, 2023.

The revised allocation split Rs 14.28 crore between Rs 2.50 crore for subsidiary-business growth, Rs 10 crore for capital expenditure and purchases of movable or immovable assets, and Rs 1.78 crore for working capital, general corporate purposes and repayment of loans. Touchwood said no funds were used before the variation for any of the three categories. Its audit committee reviewed and approved the change, while the auditors’ comments field was marked not applicable.

How much of the revised allocation had Touchwood used?

Touchwood reported Rs 7.60 crore of utilisation against the Rs 14.28 crore modified allocation as of the quarter ended September 30, 2026. It recorded full use of the Rs 2.50 crore for subsidiary growth and expansion and the Rs 1.78 crore for working capital, general corporate purposes and repayment of loans. The table showed no quarterly deviation or variation amount against any of the three revised objects.

Capital expenditure and purchases of movable or immovable assets accounted for Rs 3.32 crore of reported utilisation against the Rs 10 crore allocation. This was the only revised category not fully used in the disclosure. Comparing the stated allocation with the reported use leaves Rs 6.68 crore not shown as utilised, and the filing gives neither a completion date nor a further breakdown of that balance.

What happened to Touchwood’s 20 lakh unexercised warrants?

Touchwood forfeited Rs 5.10 crore representing the 25% upfront payment on 20 lakh warrants after their holder did not exercise the conversion option by August 31, 2024. The warrants were issued on February 28, 2023 and could be converted into an equal number of equity shares within 18 months from allotment. Touchwood cited Regulation 169(3) of the Securities and Exchange Board of India’s Issue of Capital and Disclosure Requirements Regulations, 2018.

The Rs 14.28 crore amount raised comprised Rs 7.40 crore, being 25% of the warrant issue price for 29 lakh warrants, and Rs 6.89 crore, being the remaining 75% exercise price for 9 lakh warrants. Touchwood said those 9 lakh warrants were converted into equity shares after the exercise payment. The remaining 20 lakh warrants were not exercised, so their holders did not pay the outstanding 75% exercise price and the Rs 5.10 crore upfront amount stood forfeited.

How does the forfeiture relate to Touchwood’s fund-use statement?

Touchwood’s statement identifies Rs 14.28 crore as the amount raised through the preferential issue while separately disclosing the Rs 5.10 crore forfeiture linked to the 20 lakh warrants. The annexure says this Rs 5.10 crore, representing the initial 25% subscription money for those warrants, had been carried in the financial statements as an unsubscribed portion. The stated final date for conversion into equity shares was August 31, 2024.

The filing records the revised use of proceeds as a deviation or variation in the objects of the issue rather than as a quarterly variance under the three revised categories. It defines a deviation or variation to include a change in the purposes for which funds were raised, a difference between actual and disclosed utilisation, or a change in fund-raising contract terms. Touchwood marked the monitoring-agency fields as not applicable, meaning the statement does not identify an external monitoring agency for the Rs 14.28 crore issue.

What do the revised allocations show about Touchwood’s spending plan?

Touchwood’s revised plan assigned Rs 10 crore, the largest portion of the Rs 14.28 crore allocation, to capital expenditure and movable or immovable asset purchases. This differed from the original object, which focused on meeting subsidiary companies’ capital requirements for growth and expansion. By September 30, 2026, reported use in the capital-expenditure category was Rs 3.32 crore, compared with Rs 2.50 crore fully used for subsidiary growth.

The revised plan also assigned Rs 1.78 crore to working capital, general corporate purposes and loan repayment, and Touchwood reported full utilisation of that amount. The filing does not split the Rs 1.78 crore between those three purposes, identify the subsidiaries receiving the Rs 2.50 crore growth allocation, or name the movable or immovable assets bought through the Rs 3.32 crore capital-expenditure use. Those omissions limit the specificity of the reported deployment.

Conclusion

Touchwood’s September 30, 2026 disclosure records a shareholder-approved change in the planned use of Rs 14.28 crore raised through its preferential warrant issue. It reported Rs 7.60 crore used across the three revised categories, with capital expenditure and asset purchases accounting for the only reported gap between allocation and utilisation. Separately, 20 lakh warrants lapsed without conversion, resulting in forfeiture of their Rs 5.10 crore upfront payment.

The disclosed item to watch next is deployment of the Rs 6.68 crore not reported as utilised, principally within the Rs 10 crore capital-expenditure and asset-purchase allocation. Touchwood has not disclosed a spending timetable, individual asset plan, or a further break-up of the Rs 1.78 crore already used for working capital, corporate purposes and loan repayment.