Thanks for the above message. I have few questions/deductions made based on this and I would request your/member’s view:
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This warrants will lead to capital infusion to the company of about 35 crores in 4 tranches. Earlier we thought it would be to the tune of 200 crore. Why is this so low now? The remaining amount will come from QIP? So, company would still need to resort to debt/QIP for any acquisitions as there is not much cash on the books and with 500 crore of debt.
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Equity will be diluted at the end of 18 months or whenever/if the warrants are converted to stocks by about 2% (EPS to be lowered by 2%). Not significant. (4095230/~200000000)*100%
If 4095230 is 25% of the total warrants then my above calculations would have to be multiplied by 4 in which case the above 2 questions may not be relevant.
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How is this 84.91 arrived at? I do not know the calculation behind it, can any members please enlighten? Prima facie looks to be on the lower side. Is the promoter not confident of business prospects that he did not choose to have the warrant price close to CMP? The warrant price is almost 30% lower than the CMP.
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Interestingly, the interim dividend declared more or less equal to the 25% of the warrant money that promoter would have shelved now towards the company? Which in effect means, promoter took the money from the company in terms of dividend and ploughed back the same into the company in terms of warrants. Not sure what to make out of this? Any amber flags? So we should expect another round of interim dividend near to warrant conversion.
Please put forward your opinions.
Disc: Not invested.
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