Outcome of Board Meeting for Allotment of Equity Shares on Preferential Basis for consideration other than cash.
Price
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GTV Engineering Ltd has allotted 39,42,046 equity shares at Rs. 59.65 per share (face value Rs. 2, premium Rs. 57.65), aggregating to approximately Rs. 23.52 crores, on a preferential basis to GTV Infrastructures Private Limited (GIPL), a promoter group entity. The allotment is on a share swap basis — no cash was raised. In exchange, GTV Engineering acquired 35.31% stake (1,12,56,250 equity shares) in Chirchind Hydro Power Private Limited (CHPPL), a hydro power company. With this acquisition, CHPPL has become a subsidiary of GTV Engineering, and Shivalik Energy (CHPPL's subsidiary) has become a step-down subsidiary. The paid-up equity capital of the company has risen from Rs. 9.37 crores (4.69 crore shares) to Rs. 10.16 crores (5.08 crore shares), an expansion of about 8.4%. Post-allotment, GIPL holds 7.76% in GTV Engineering.
This is a non-cash, share-swap acquisition that diversifies GTV Engineering into hydro power generation without straining its cash flows. However, existing shareholders face dilution of around 8.4% as new shares are issued to the promoter group entity, and the move expands the consolidated group structure with new subsidiaries.