Himadri Speciality board approves preferential issue of warrants worth Rs 508 croreHSCL - 307 Change: 6.00 (1.99 %)
News: The board of directors of the company have approved preferential issue of 7.26 crore warrants to the promoter group (Anurag Choudhary and family) and some individuals at a price of Rs70/share, with aggregate total equity raise pegged at ~Rs 508 crore (~14% of current market cap).
Views: Issuance of warrants at this juncture prime facie looks like a measure to increase the equity stake in the company post the total management control attained by Anurag Choudhary and family pursuant to the family settlement in the recent past. The exact use of such money could not be ascertained at this point in time (Net debt at Rs 660 crore as of December 2021 with net debt: equity at 0.4x). Moreover the price of issuance (Rs 70/share) is at a discount to the current market price (Rs 89/share), which will limit the gains in the stock price in the near term. The company is yet to declare its annual results for FY22 (board meeting scheduled for July 21, 2022).