Magellanic Cloud shareholders have approved the company’s proposed preferential issue of equity shares and convertible warrants but rejected a separate resolution seeking approval for related-party transactions under Section 185 of the Companies Act, 2013. The Extra Ordinary General Meeting (EGM) held on July 24, 2026, saw strong backing for the capital raise, which aims to fund drone manufacturing and working capital needs, while the related-party proposal failed to secure the requisite three-fourths majority.

The preferential issue resolution received 90.22% support from members voting via remote e-voting, allowing the company to proceed with issuing 3,69,28,573 equity shares and 12,67,00,000 convertible warrants. This follows a corrigendum issued earlier that disqualified one allottee and consolidated allocations for another, reducing the total equity share count from the initial application. The proceeds, totaling ₹490.89 crore, are earmarked for specific objects including ₹150 crore for a drone manufacturing facility and ₹100 crore for working capital.

In contrast, Resolution No. 3, which sought approval for transactions with MCRAY Xtend India Private Limited, Scandron Private Limited, and Motivity Labs Private Limited, was not passed. The resolution secured only 14.99% votes in favor, against 9.74% votes against. Notably, 75.27% of the total votes cast were declared invalid, primarily due to non-compliance by promoters and connected persons who are required to abstain from voting on related-party transactions under the Listing Regulations. The Scrutinizer’s report explicitly stated that the resolution did not secure the requisite majority.

The second special resolution, approving an increase in the aggregate ceiling for investment by Non-Resident Indians (Repatriable) and Overseas Citizens of India from 10% to 24%, was also approved with 90.27% support. The EGM was chaired by Chairman & Managing Director Joseph Sudheer Reddy Thumma and conducted through Video Conferencing in compliance with regulatory circulars. The meeting concluded at 12:21 p.m. IST after addressing shareholder queries.

What the Numbers Show

The stark divergence between the approval of the capital raise and the rejection of the related-party transactions highlights strict adherence to governance norms by institutional and retail investors. While the high invalid vote count (75.27%) in Resolution No. 3 is procedural—reflecting mandatory abstention by interested parties—the failure to pass the resolution indicates that independent shareholders did not provide the necessary consent for these specific related-party deals. This outcome may require the company to renegotiate terms or seek alternative structures for engagements with MCRAY Xtend India Private Limited, Scandron Private Limited, and Motivity Labs Private Limited.

A wholly owned subsidiary of Magellanic Cloud , Provigil Surveillance Limited, has secured a contract worth ₹6.93 crore from South Central Railway, Vijayawada Division. This latest Letter of Acceptance (LOA) comes within days of a previous ₹6.25 crore award from the same division, taking the cumulative value of railway surveillance orders secured by the company to ₹13.18 crore within a week. The order encompasses the supply, installation, testing, and commissioning of advanced IP-based CCTV surveillance systems across 15 stations, including major junctions such as Vijayawada, Tenali, Ongole, Nellore, Gudur, Rajahmundry, and Kakinada.

Contract Details

The key details of the contract are outlined below:

Scope and Execution

The scope of work entails the deployment of IP-based CCTV surveillance systems, Network Video Recorders (NVRs), optical fibre connectivity, and other associated Signalling & Telecommunication (S&T) infrastructure. The project will culminate in the successful handover of the surveillance system. The order is not a related party transaction, and none of the promoter or group companies have any interest in the entity awarding the contract.

Joseph Sudheer Thumma, Managing Director & Global CEO of Magellanic Cloud Limited, stated that winning another order from the South-Central Railway within days of the previous award is a strong endorsement of the company's execution capabilities. He highlighted that consecutive orders reflect the trust built through consistent delivery and quality, reinforcing the company's strategic focus on building AI-enabled surveillance and intelligent Video Management System (VMS) platforms for critical infrastructure. The company remains committed to delivering AI-enabled surveillance and integrated security solutions while creating sustainable value for customers and shareholders.