Heritage Foods Ltd

Hi, let’s say there are 100 shares at 350 and 100 rights share at 5. Promoter holding is 50 perc.

Now,

1. Ex rights price would be 355/2 = 177.5
2. Let’s say promoter applies for 2x shares. Among public 10 perc applies for 5x, 20 perc 1x and 20 perc don’t apply.

So now 80 shares are directly alloted. For the remaining 20, 60 perc shareholders are remaining. They each get the remaining rights issue, so promoter gets (50*20)/60, 16.7 shares.

Promoter shareholding increases to (50+50+16.7)/2!!
Which is 58.3!!!

Promoter and 10 perc shareholders win.
20 perc shareholders don’t have any effect.
20 perc shareholders lose big time!!!

What the promoter group is doing here is extremely unethical and sebi should never allow this.