I think they’ve given hints of raising funds from past 2 concalls when Tarun Dua made the blooper of declaring the well discussed 800 crore and backtracking.
He also mentioned they are considering a mix of internal cash accruals, debt and preferential allotment for raising funds.
Further, I don’t think the company needed to have discussed it in the previous calls as a half baked plan couldn’t be discussed. And yes, they haven’t raised the funds yet. It is awaiting voting from shareholders on September 11. If they had declared they are raising funds, then immediate question would be who are you raising it from, right? So, this is the plan. And I think in the AGM, the obvious question of fund deployment breakdown will be grilled and will be the center of attention. The voting extends to 30 minutes after the AGM so, technically the votes can wait till then.
Having said that, based on the promoter holding, I don’t think it’ll matter how general public votes. I do agree, however, that the use of funds could be published before the AGM (there’s still time) as that would give people time to prepare what and how to ask instead of winging it in the AGM itself.
The channel for fund raising is a matter of debate with no end. Debt comes with no dilution but interest costs that hits the profitability ratios and NPM. Preferential allotment comes with wider participation (used for projecting confidence and high profile portfolio, viz. Kachholia) which further boosts confidence and participation and the number of shareholder right now is relatively small. I do see the company doing a split in the near future (12 months) as the price is getting high and the number of shares is quite low. Anyone who’s not interested in dilution could shore up more shares to maintain their holding, although it’ll be at a steeper price than the pref. allotment (at a ~34% premium). Overall, imo I don’t like the dilution I’ll get hit with but understand it as a necessary evil.
On account of promoter dilution, Tarun Dua holding went down by 0.05% which (0.05% of 1…45 cr. share X 2272 CMP) = INR 1.64 cr. This is pretty small but definitely worth asking in the AGM or as @akash_das has mentioned, is ESOP, so inconsequential from our perspective.
@akash_das Tarun Dua is not in the list of people buying in the Pref. issue though and he’s the one whose holding went down.
| Subscribe To Our Free Newsletter |
