Intimation of In-Principle approval received for issue of convertible warrants on preferential basis.
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Awaiting price reaction for this filing.
BSE has granted in-principle approval to Hemo Organic Limited for issuing 99,75,000 convertible warrants on a preferential basis. Each warrant can be converted into one equity share of face value Rs. 10, with the issue price set at not less than Rs. 12.50 per warrant (i.e., at a Rs. 2.50 premium over face value). The warrants will be allotted to non-promoters. This is only the stock exchange's initial clearance — the company still needs to complete the allotment and file a separate listing application within 20 days of allotment. The company has been advised to strengthen internal controls and obtain undertakings from allottees to prevent any non-compliant trading.
If fully converted, this preferential warrant issue will bring in around Rs. 12.47 crore of fresh capital into the company (at the minimum price) and lead to dilution of existing shareholders' equity by roughly 10% on a fully-converted basis. The fact that warrants are being placed with non-promoters suggests the company is seeking to raise expansion capital, though the small-cap nature and BSE's warning about compliance suggest investors should watch for further updates on allotment and end-use of funds.