Allotment of 3750 nos. of 0% Non-Convertible Redeemable Preference Shares (NCRPS) on Private Placement basis
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TCI Industries has allotted 3,750 NCRPS to two promoter group companies — Transcorp Estates (1,250 shares) and Bunny Investment & Finance (2,500 shares). The shares have a face value of Rs. 100 each and were issued at a Rs. 300 premium, taking the issue price to Rs. 400 per share, for a total consideration of Rs. 15 lakh. The NCRPS carry no dividend, are non-convertible into equity, and have no voting rights. They can be redeemed by the company at any time within 20 years at a maximum premium of 18% per annum (simple interest) on the issue price. As these are NCRPS and not equity shares, there is no change in the company's paid-up equity capital and the instrument will not be listed on any stock exchange.
There is no equity dilution and no immediate effect on the stock price since the instrument is non-convertible and unlisted. However, the company has effectively raised Rs. 15 lakh from promoters at an attractive cost — if redeemed at the maximum 18% annual premium, the promoter funding carries a high effective yield, which could be a future cash outflow depending on when redemption is triggered.