Zelio E-Mobility ₹168 crore preferential issue in 2026

What the board approved and why it matters

Zelio E-Mobility, a BSE SME-listed electric two- and three-wheeler manufacturer, has received board approval to raise up to ₹167.96 crore through a preferential issue of equity shares and convertible warrants. The proposal remains subject to shareholder and regulatory approvals, including approvals from stock exchanges. The company has linked the fundraising to its expansion plans, including manufacturing and distribution scale-up across India. It also wants to accelerate development of a dedicated electric three-wheeler manufacturing facility in Patan, Haryana. The capital raise includes participation from both non-promoter investors and the promoter group through different instruments. The company will place the proposal before shareholders at an Extraordinary General Meeting (EGM) scheduled for October 20, 2026. The issue price for both equity shares and warrants has been fixed at ₹853.

Preferential issue structure: equity plus convertible warrants

The board-approved fundraising is split into two legs - equity shares to non-promoter investors and convertible warrants to promoters. Zelio plans to issue up to 9.73 lakh fully paid-up equity shares at ₹853 per share. This equity portion aggregates to about ₹83 crore (₹82.99 crore as per the board-approved aggregation cited). Separately, it plans to issue up to 9.96 lakh convertible warrants at ₹853 each to members of the promoter category. The warrant issue is expected to raise nearly ₹85 crore (₹84.95 crore to ₹84.96 crore in the details provided). Together, these two legs take the total preferential issue to around ₹167.95 crore to ₹167.96 crore. The company has stated that the issue price is not lower than the floor price determined with reference to the relevant date of September 18, 2026.

Who will get the equity shares: four non-promoter allottees

The company has identified four non-promoter institutional and private investors as proposed allottees for the equity shares. These are Motilal Oswal Financial Services, Calliope Capital Advisors LLP, Param Value Investments and Hem Growth Opportunities Fund. Under the proposed allotment, Motilal Oswal Financial Services is set to receive 4.70 lakh equity shares valued at around ₹40.09 crore (also cited as ₹40.1 crore). Calliope Capital Advisors LLP, owned by Navin Agarwal, is proposed to receive 3.68 lakh shares worth nearly ₹31.39 crore (also cited as ₹31.4 crore). Param Value Investments, owned and controlled by Mukul Agrawal, will be allotted 1.00 lakh shares amounting to ₹8.53 crore. Hem Growth Opportunities Fund is proposed to receive 35,000 shares valued at approximately ₹2.99 crore. The total number of equity shares proposed under the preferential issue is up to 9,73,000.

Warrant issue to promoters: payment terms and conversion window

Alongside the equity allotment, the board has approved issuance of up to 9.96 lakh convertible warrants to promoters Niraj Arya, Deepak Arya and Kunal Arya at the same price of ₹853 per warrant. Zelio has disclosed the standard warrant payment structure for the issue. At least 25% of the warrant subscription amount must be paid at or before allotment, with the remaining 75% payable at the time of conversion into equity shares. For the convertible warrants, the upfront amount works out to ₹213.25 per warrant, based on 25% of ₹853. The balance is payable when the warrants are converted, and the company has said conversion can take place within 18 months from the date of allotment. This structure means a portion of the proceeds will come in immediately, while the remainder depends on conversion within the allowed period.

Dilution impact: promoter and public shareholding on a fully diluted basis

Zelio has also provided an estimate of shareholding changes assuming the equity shares are issued and the warrants are fully converted. Following the proposed share issuance and complete conversion of the warrants, promoter and promoter group shareholding is expected to reduce from 72.76% to 70.87% on a fully diluted basis. Over the same fully diluted basis, public shareholding is projected to increase from 27.24% to 29.13%. The change reflects the combined impact of issuing equity to non-promoter investors and additional equity that could arise from warrant conversions. These numbers are presented as projections tied to full completion of the transaction.

Use of proceeds: manufacturing, distribution, and the Haryana plant

The company has said the proceeds are intended to support manufacturing and distribution expansion. Specifically, Zelio plans to use funds to expand its manufacturing capacity, strengthen its distribution network across India, and develop a dedicated electric three-wheeler manufacturing facility in Patan, Haryana. The Haryana project has been positioned as an upcoming three-wheeler plant, with the fundraise intended to accelerate its development. The company has framed the fundraising as supporting a broader pan-India expansion plan. No separate line-item break-up of spending has been provided in the information shared. But the stated uses point to capex and go-to-market scaling rather than a single-purpose deployment.

Key approvals and the October 20 EGM

The preferential issue is subject to shareholder approval and regulatory clearances. Zelio has scheduled an Extraordinary General Meeting for October 20, 2026 to seek shareholder consent. The company has also indicated that it will seek approval for related-party transactions as part of the same process. These steps are important because preferential issues on listed entities require compliance with applicable regulations and shareholder authorisation. The company has referenced the need for stock exchange approval as well. The sequence laid out is board approval first, followed by shareholder approval at the EGM, and then other regulatory processes.

Related-party transactions: five entities, ₹50 crore each

Apart from the fundraising, Zelio plans to seek shareholder approval for related-party transactions with five entities. The company has stated it will seek approval for transactions of up to ₹50 crore each with Torque Innovation EV, AVR Auto Industries, Jai Bharat Engineering Tools, Jai Bharat Auto Components and Rajdhani Machinery Store. The proposed limits have been communicated as individual caps per entity. The company has not provided further details in the shared information on the nature, tenure, or pricing of these transactions. The approvals are expected to be routed through the same shareholder meeting timeline that covers the preferential issue.

Monitoring agency and compliance triggers

Because the aggregate size of the preferential issue exceeds ₹100 crore, Zelio has noted that it is required to appoint a monitoring agency. Brickwork Ratings India Private Limited has been appointed to monitor the utilisation of proceeds in compliance with SEBI ICDR Regulations. The appointment is tied to the regulatory threshold referenced by the company. Monitoring agencies typically track whether proceeds are used for the stated objectives, and the company has named Brickwork Ratings for this role. Zelio has also stated that the issue price is aligned with the floor price framework, referencing September 18, 2026 as the relevant date for determination. These disclosures are aimed at meeting the compliance expectations tied to preferential allotments.

Background: recent corporate actions and listing history

Zelio has been actively taking board-level steps around funding and corporate permissions in September 2026. The company’s board approved a significant increase in borrowing powers up to ₹1,000 crore at a meeting held on September 7, 2026. Separately, the board meeting to consider fundraising through a preferential issue or other permissible routes was scheduled for September 23, 2026, which aligns with the date on which the preferential issue approvals were later disclosed. On its capital market history, Zelio E-Mobility’s IPO opened on September 30, 2025 and closed on October 3, 2025, with listing dated October 8, 2025. The IPO issue size is cited as up to ₹78.34 crore, with a fresh issue aggregating up to ₹62.83 crore. The company is listed on BSE SME, as stated in the information provided.

Summary table: structure, pricing, and dates

Market impact: what investors can infer from the disclosed numbers

The disclosed structure shows Zelio raising capital at a single price point of ₹853 for both equity and warrants, with participation from named institutional and private investors as well as the promoter group. The immediate inflow is clearer for the equity leg, while the warrant leg involves an upfront payment of 25% and the remainder on conversion within 18 months. On the ownership side, the company has quantified the expected promoter stake reduction from 72.76% to 70.87% on a fully diluted basis, alongside a rise in public shareholding from 27.24% to 29.13%. The appointment of a monitoring agency indicates the issue size has crossed the ₹100 crore compliance threshold referenced by the company. The parallel request for approvals for related-party transactions of up to ₹50 crore each suggests that governance-related resolutions may be bundled at the October 20 EGM. The company’s stated use of proceeds focuses on capacity expansion, distribution strengthening, and progress on the Patan, Haryana three-wheeler facility.

Conclusion: next milestone is shareholder voting

Zelio E-Mobility’s board-approved preferential issue of up to ₹167.96 crore sets a defined funding plan with identified allottees, a single disclosed price of ₹853, and a clear split between equity and warrants. The company has tied the proceeds to manufacturing expansion, distribution growth, and development of its three-wheeler plant in Patan, Haryana. The next confirmed step is the Extraordinary General Meeting on October 20, 2026, where shareholders will vote on the preferential issue and the proposed related-party transaction approvals. Regulatory and stock exchange approvals remain part of the process, as stated by the company. The company has also disclosed monitoring arrangements through Brickwork Ratings, reflecting the compliance framework applicable to an issue of this size.