Karnika Industries Limited successfully conducted its Extraordinary General Meeting (EGM) on Monday, May 11, 2026, through Video Conferencing (VC) and Other Audio-Visual Means (OAVM). The meeting, which commenced at 1:25 P.M. (IST) and concluded at 1:52 P.M. (IST), was attended by 18 members. The proceedings were overseen by CS Poonam Binani as the Scrutinizer. All proposed special resolutions were passed with the requisite majority, primarily through remote e-voting.

EGM Proceedings and Resolutions Passed

The Managing Director apprised members about the proposal for raising funds through the issuance of Convertible Warrants on a preferential basis. The EGM notice dated April 16, 2026, along with three corrigenda, were taken as read. The following resolutions were passed as Special Resolutions:

Voting Results Summary

The Scrutinizer's report confirmed that the resolutions were passed with 100% of the valid votes cast in favour. Remote e-voting was conducted via NSDL from May 6, 2026, to May 10, 2026. The detailed voting outcomes for the special business are as follows:

Preferential Issue Details

The Board of Directors approved the issuance of up to 39,66,860 Convertible Warrants on a preferential basis at an issue price of ₹121 per warrant. The issue price includes a premium of ₹111 per warrant and aggregates to ₹47,99,90,060. The proceeds, amounting to approximately ₹40 crore, are earmarked for working capital requirements, while the remainder will be utilized for general corporate purposes.

Shareholding Pattern Impact

The preferential issue is proposed to be allotted to 14 allottees, including promoters and one non-promoter. Upon full conversion, the promoters' shareholding will increase from 73.39% to 74.74%, ensuring they remain in control of the Company. The EGM notice and proceedings have been uploaded to the Company's website and the National Stock Exchange of India Limited.

karnika industries Limited has issued a corrigendum to the notice of its Extraordinary General Meeting (EGM) scheduled for May 11, 2026, through video conferencing and other audio-visual means. The corrigendum, dated April 28, 2026, modifies the Special Resolution pertaining to Item No. 2 and the Explanatory Statement forming part of the EGM Notice dated April 16, 2026. The modifications have been made based on suggestions and comments received from the National Stock Exchange of India Limited.

The Board of Directors at its meeting held on April 11, 2026, approved the issuance of up to 39,66,860 convertible warrants on a preferential basis. Each warrant carries a right to subscribe to one fully paid-up equity share of the company at a price of ₹121 per warrant, including a premium of ₹111 per warrant, aggregating up to ₹47,99,90,060. The proceeds from the preferential issue are proposed to be utilized primarily for working capital requirements, including timely payment of trade creditors and servicing or repayment of bank loans and other short-term borrowings. The balance proceeds will be utilized for general corporate purposes.

Pricing and Valuation Details

The issue price of ₹121 per warrant has been determined in accordance with Chapter V of the SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018. The relevant date for price determination is April 10, 2026. The floor price is ₹120.15 per equity share, being the higher of the 90-day volume weighted average price (VWAP) of ₹120.15 and the 10-day VWAP of ₹110.30. The company has obtained a valuation report dated April 10, 2026 from Mr. Manish Gadia, an Independent Registered Valuer, which has been taken into consideration while determining the issue price.

Utilization of Issue Proceeds

The company intends to utilize the proceeds raised through the preferential issue towards specific objects. The indicative allocation of funds is as follows:

Proposed Allottees and Shareholding Pattern

The convertible warrants shall be issued and allotted to 14 proposed allottees, including 13 promoters and promoter group entities, and one non-promoter. The detailed allocation of warrants among the proposed allottees is provided below:

The shareholding pattern prior to the preferential issue is as on March 31, 2026. On a fully diluted basis, assuming full conversion of 39,66,860 convertible warrants into equity shares, the post-issue shareholding pattern shows promoters' holding increasing from 73.39% to 74.74%, while non-promoters' holding decreases from 26.61% to 25.26%. The existing promoters will continue to be in control of the company, and there will not be any changes in the management or control as a result of the proposed preferential allotment.

Regulatory Compliance and Timeline

The corrigendum states that the allotment of convertible warrants shall be completed within a period of 15 days from the date of passing of the resolution by the shareholders, subject to regulatory approvals. The company has obtained a certificate from Mrs. Poonam Binani, Practicing Company Secretary, certifying that the preferential allotment is being made in accordance with the requirements of Chapter V of the SEBI ICDR Regulations. The complete issue proceeds are expected to be received within 18 months from the date of allotment of the warrants. The equity shares issued upon conversion of warrants will be listed on the NSE (SME Emerge) and rank pari-passu with existing equity shares.