Increase in Authorized Share Capital and To Alter Object clause of Memorandum of Association of the Company
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Kachchh Minerals Ltd's board approved increasing authorized share capital from Rs. 10 Crore to Rs. 90 Crore (a 9x expansion). The company will acquire 100% of Rajhans Procon Private Limited (RPPL), a real estate firm with Rs. 27.50 Crore provisional turnover, for Rs. 206.74 Crore — paid entirely through issuing 7.38 crore new equity shares at Rs. 28 each (face value Rs. 10, premium Rs. 18). This means existing 1 crore shares will be diluted to roughly 12% of the expanded share base, with the 47 RPPL shareholders becoming the new majority owners. The company is also diversifying its objects clause to include agriculture products, beverages, films/media, construction and real estate, and general trading. An EGM is set for May 23, 2025 to seek shareholder approval. Additionally, the investment limit under Section 186 was raised to Rs. 300 Crore, a new Company Secretary was appointed, and an Independent Director resigned.
Existing shareholders face massive dilution — their stake will shrink to about 12% post-allotment, and control effectively shifts to the incoming RPPL shareholders. The company is transforming from a minerals entity into a real estate-led diversified business, but the valuation (Rs. 206 Crore for a Rs. 27.5 Crore turnover firm) and the swap ratio will likely raise concerns about value transfer to existing shareholders. Stock may face downward pressure on the news; EGM approval on May 23 is the key event to watch.