Shree Rajeshwaranand Paper Mills approves ₹12 crore preferential equity issue
- Shree Rajeshwaranand Paper Mills approved a ₹12 crore preferential allotment of 1.2 crore equity shares.
- The issuance implements the NCLT-approved Resolution Plan from November 2024.
- New investors will hold 94.81% of the capital, reducing existing shareholders to 5%.
- Pratik Kakadia becomes the largest single shareholder with a 51.35% stake.
- The Board applied to BSE for in-principle listing approval for the new shares.
*this image is generated using AI for illustrative purposes only.
Shree Rajeshwaranand Paper Mills Limited approved a ₹12 crore preferential allotment of equity shares on August 21, 2026, as part of its court-approved resolution plan. The move aims to restructure the company’s capital following the completion of the Corporate Insolvency Resolution Process (CIRP).
The Board authorized the issuance of 1,20,00,000 equity shares with a face value of ₹10 each. This transaction fulfills the equity infusion requirements mandated by the National Company Law Tribunal (NCLT), Ahmedabad, which approved the Resolution Plan on November 27, 2024.
Shareholding Restructure
The allotment significantly alters the ownership structure of the Corporate Debtor. Post-allotment, the new investors and affiliates will hold approximately 94.81% of the capital, while existing shareholders will retain a 5% stake. This ensures the public shareholding remains above the 5% threshold required for listing compliance.
| Allottee | Shares Allotted | Amount (₹) | Post-Allotment % |
|---|---|---|---|
| Pratik Kakadia | 6,500,000 | 65,000,000 | 51.35% |
| Ramjibhai Kakadia | 3,813,810 | 38,138,100 | 30.13% |
| Hetal Kakadiya | 543,320 | 5,433,200 | 4.29% |
| Shardaben Kakadia | 500,000 | 5,000,000 | 3.95% |
| Vinod Kabra | 632,370 | 6,323,700 | 5.00% |
| Others | 107,090 | 1,070,900 | 0.86% |
| Total | 12,000,000 | 120,000,000 | 94.81% |
Regulatory Approvals
The Board also approved an application to the Bombay Stock Exchange (BSE) for in-principle approval to list the newly issued equity shares. The company will comply with the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, and the Companies Act, 2013. The allotment is effective by virtue of the NCLT order, requiring no further instruments.
What the Numbers Show
The concentration of ownership is highly skewed toward the new implementing entity group. Pratik Kakadia and Ramjibhai Kakadia alone will control over 81% of the post-allotment equity, indicating a definitive shift in corporate control from the pre-CIRP structure to the resolution applicants.
How will the high concentration of ownership (over 81% held by two individuals) impact the company's corporate governance and minority shareholder protections post-resolution?
What specific operational turnaround strategies has the new management team outlined to improve Shree Rajeshwaranand Paper Mills' profitability following the CIRP?
Will the company face any liquidity constraints or trading halts on the BSE while processing the listing of the newly allotted shares?
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