News: Ramkrishna Forgings’ board of directors have approved a preferential issue of warrants amounting to 46 lakh units at Rs 205/share (close to the CMP) to promoters and individuals, with aggregate equity fund raise pegged at Rs 94 crore. The same has been put forth for shareholder’s approval in the EGM called on October 12, 2022.
View: The amount raised is small in comparison to the debt on the company’s book (~Rs 1,600 crore as of FY22) and should be just viewed as a confidence boosting measure. Post conversion of warrants into equity shares, the promoter group stake in the company is set to increase from 46.3% to 47.4%. The company intends to use large part of the proceeds for retirement of debt on its books.
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