Receipt of In-principal approval for issue of equity shares and warrants on preferential basis from the Bombay Stock Exchange
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iStreet Network has received BSE in-principle approval to issue 4.88 crore equity shares of Rs. 4 face value at a minimum price of Rs. 6 per share to promoters and non-promoters on a preferential basis. Additionally, the company has approval to issue 9.60 crore warrants, each convertible into one equity share at the same minimum price of Rs. 6. At the floor price, the equity shares would raise about Rs. 29.3 crore, and if all warrants are exercised, an additional Rs. 57.6 crore could come in, totalling up to roughly Rs. 87 crore. The issue price of Rs. 6 represents a 50% premium over the face value of Rs. 4. The BSE approval is an initial step; actual allotment and listing are still subject to compliance with SEBI ICDR Regulations and other statutory requirements.
This is a sizeable preferential issue for a small company and signals a major fundraising event. Shareholders should brace for significant dilution risk since the combined equity and full warrant conversion could more than double the current equity base. On the positive side, the promoter participation suggests management's confidence and the funds could be used for growth if the purpose is disclosed later.